Tax on other income
I work for a company which supplies cell phones to some of its employees. From what I have been told, this should be considered taxable income when it is used on a personal basis. Who is responsible for reporting this to the IRS? I feel like the people who have the phones should be the ones reporting it but I am afraid that it will fall back on human resources. I don't want to be in trouble for not reporting it.
1 Answer from Attorneys
Re: Tax on other income
Although you should allocate personal use of a business cell phone, it is impractical. Since the cost has so rapidly declined for unlimited usage, there can be an argument that no marginal cost is incurred for personal use of the phone. Therefore, there is no income to be allocated.
Frankly, the issue is minor and would take more effort to track than it is worth.
I hope this helps!
Ron Cappuccio
http://www.TaxEsq.com
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