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Can I write off an item as a business expense and occasionally use it for personal use?

As an example, I own a small business (just me) and purchased a new smart-phone and phone plan (with unlimited talk, text, and data) for the business with company funds. My rule for this phone and plan is for it to be “business use only”, however, if I’m stuck in an unfortunate situation, I sometimes use my phone and plan for not-so-business needs such as:

Would I still be able to write this phone and phone plan off as a business expense?

Answer 1671

In general you have two choices:

  1. Keep track somehow (be that automatic or manual log), and then calculate the actual percentage. This has the con of being a bunch of work (how much of course depends on how much you use the phone in total and your record keeping set-up). This has the plus of being hyper above board. I can confirm that if you ever get an audit they'll either see that and say okay look being nice and honest we'll just take a quick look or they say oh that is too exact they must be hiding something. (To be exact my experience is with the CRA but same type of auditors)
  2. Treat it as listed property and follow the depreciation rules. As far as I know cellphones are not listed property but those rules are good for pretty much everything unless there are specific bulletins for them (like farm equipment is treated a bit differently etc.). To extremely summarize (like from over a 100 pages down to a couple sentences). As long as your business usage is over 50% you can claim it as a business item with full claim on deprecation under section 179 and expenses related to it's upkeep/maintenance. For the usage minutes/data it would be safer to do option #1 although given that you have an unlimited plan which means that you are not paying extra it should be safe to do the whole cost for the ongoing fees. Note: you'll want to at least keep minimal records to prove if required that over 50%/the majority of usage is business.

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