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Cell phones for business use
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Cell phones for business use
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What is a common way of paying for personal cell phones to be used for occassional business use? We have a few positions that will be frequently be using cell phones for business calls. We have anothe
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Forums » Topic Forums » Benefits & Compensation » Cell phones for business use
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Cell phones for business use
posted at 6/24/2010 10:12 AM EDT
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Posts: 1
First: 6/24/2010 Last: 6/24/2010 |
What is a common way of paying for personal cell phones to be used for occassional business use? We have a few positions that will be frequently be using cell phones for business calls. We have another handful of employees that use and/or need to be available via cell phones, but not enough to justify company issued phones, nor do we want anyone to maintain a personal and business phone. Since most cell phones are billed by monthly package rates, do companies simply issues phones and plans with personal use permitted or reimburse portions of the monthly fees (and if so how do they determine that portion)?
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Cell phones for business use
posted at 6/24/2010 11:15 AM EDT
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
Do all of the employees already have cellphones?
If they do, it might be easier to have them submit a monthly cell phone payment request (with copy of bill) for reimbursement at a set amount, say $20/month. |
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Cell phones for business use
posted at 6/29/2010 10:09 PM EDT
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Posts: 55
First: 12/23/2000 Last: 8/26/2010 |
Over time it will be difficult to bifurcate personal / official calls for all employees even if you had a system to claim reimbursement of official calls only. We've determined average usage, and irrespective of actual usage, we pay out the amount with monthly salary, irrespective of actual usage--no documents required. This way, employees make prudent use and the administrative processing hassles are avoided. |
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Cell phones for business use
posted at 6/30/2010 7:38 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
You should make sure you are following the IRS's accountable plan rules from Publication 15 if you are providing a non-taxable reimbursement. Look at page 11 for more information.
If "You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business." One could argument that a prior pattern of usage could be used for a certain period of time as long as it is reviewed over time to make sure it hasn't changed more than a reasonable amount. I strongly suggest speaking with your tax consultant on how to set it up so it ends up being a nontaxable accountable plan OR making sure your employees understand it is considered taxable wages. Last I heard, ours told us that we should be prorating each bill each month into business use vs nonbusiness use. Most of our employees who use it for both business and personal give up requesting reimbursement because of the hassle. And because they end up using it for a majority of personal time when they actually have to split out the amounts pro-rated. |
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Cell phones for business use
posted at 6/30/2010 7:38 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
You should make sure you are following the IRS's accountable plan rules from Publication 15 if you are providing a non-taxable reimbursement. Look at page 11 for more information.
If "You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business." One could argument that a prior pattern of usage could be used for a certain period of time as long as it is reviewed over time to make sure it hasn't changed more than a reasonable amount. I strongly suggest speaking with your tax consultant on how to set it up so it ends up being a nontaxable accountable plan OR making sure your employees understand it is considered taxable wages. Last I heard, ours told us that we should be prorating each bill each month into business use vs nonbusiness use. Most of our employees who use it for both business and personal give up requesting reimbursement because of the hassle. And because they end up using it for a majority of personal time when they actually have to split out the amounts pro-rated. |
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