QUESTION: I am an employee and I work on the road for a company that requires me to use a cell phone. How can this be set up to benefit me and my employer the best for income tax purposes?

ANSWER: I recommend that you have your employer pay for the cell phone and the monthly cost. Your employer will obtain a full deduction and be able to write off the full cell phone cost, under Section 179, in the year of purchase. Recordkeeping rules were recently relaxed and your employer no longer must keep onerous records of your business versus personal use. It is interesting that the IRS has not yet exercised its authority to treat your personal use of the cell phone provided by the employer as income (a good thing).

Feel free to contact me if you or someone you know has this type of situation. Financial Planning and tax planning advice presented here is general in nature, and individual circumstances make applying these general rules tricky; thus, the above answer cannot be applied to all circumstances because the slightest variation could cause a different outcome.