IRS Issues Guidance on Cell Phones Provided to S Corp Employees
Even though you own your S corporation for tax purposes you are an employee. When an employer or S corporation provides an employee with a business cell phone primarily for 
non-compensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require record keeping of business use in order to receive this tax-free treatment. The IRS announced a similar administrative approach that applies to small businesses that provide cash allowances and reimbursements for work-related use of personally-owned cell phones. Under this approach, employers that require employees, primarily for non-compensatory business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees' expenses for reasonable cell phone coverage as nontaxable. However this treatment does not apply to reimbursements of unusual or excessive expenses or to reimbursements made as a substitute for a portion of the employee's regular wage.
Minimizing your taxes requires careful tax planning each month or quarter. To learn more about business cell phone use in your s corporation and tax planning strategies to minimize your federal tax burden call for a free consultation today or "click here" to request a call back from one of our tax professionals.
