The Tax Deductibility of Cable Internet Phone Expenses
If a single phone line (whether land, cable, or cell) is being used for
both business and personal calls, historically the IRS has wanted to see a
every phone call (not possible with cable Internet providers), or an appropriate breakdown of how much of the
phone expense is personal and how much is business.
My accountant confirmed that if you're turned an old landline phone number in
your home into your home office telephone, and added it to your Internet cable
service package, you can deduct the full amount of the Internet service
provider's bill so long as you also have another telephone number (cell phone)
that can be considered your personal phone.
If you use a cell phone for both personal and business purposes, to get a
business deduction you'd need to calculate what percentage of the cost is
related to business use of the phone.
The following articles on the Web offer additional insight into the
tax deductibility of different types of telephone services.
Expenses for Your Home Office
Are Internet, Cable & Phone Write-Offs for a Small Business?
More About Wow! Services
Wow! is a great cable service provider, but they serve a limited territory
only in some areas of Illinois, Michigan, Ohio, and Indiana.
Visit their website to see if their service is available in your area.
If so, you will find it costs less than that offered by Comcast.
The reason their territory is so small is because this is what used to be
covered by Americast, which was a part of AT&T until that company was bought by
Southwest Bell several years ago. At that time, private investors bought Americast and
renamed it Wow!
I learned that it costs anywhere from $100 to $400 million to
"wire" a new city, and this has to be done before Wow! can serve even one
customer in a new area. Thus the company, though growing, is growing slowly, one
city at a time. Iím grateful to be in an area they serve because they are saving
me a bundle of cash.
A Note from Betsy in the Midwest:
"We have never used cable. Too expensive, and we don't have time to watch it, but for several years
when our local telephone company would not come this far (only two blocks away)
for high speed, we subscribed to the Internet through a cable company. Half the
time it did not work, so now we have turned to MagicJack and use our phone with
a "naked" standalone DSL medium high service for $29/month through our
telephone company. Generally it works fine, plus we have all the perks, as if we
had additional services on a land line. So, for $20/year, the cost of
and our DSL, we have the whole thing."
Copyright © 2000-2013
by Barbara Brabec
All Rights Reserved
Barbara Brabec's World
Do You Really Need a Landline Phone (and the Expense That Goes With It)?
How I cut my monthly telephone expenses
from $117 to just $25 by switching my
local and long-distance service from
AT&T to my cable Internet service provider
by Barbara Brabec
AS USUAL, it took me awhile to "get it," but one day I woke up and realized I
no longer needed to be tethered to AT&T, but could get everything I needed in the
way of long distance and local telephone service from my cable Internet
Until mid-September, 2011, I had two landline phones; the residential phone
my husband and I had installed when we moved into our home in 1989; the other, a
business line added in 2000 when I opened my website and
needed a separate line for working on the Web. Through the years, it was a
challenge to find the best long-distance rates for both lines, but things got better when AT&T
began to offer affordable unlimited long-distance packages.
Do You Need a Separate
Business Line to be "Legal"?
Iíve always preached to my home business readers that the use of a residential
telephone number for business purposes may be a violation of one's local telephone
company's regulations. Years ago when I wrote Homemade Money, I learned that each
state has a separate commission that determines the usage of a residential
phone, so I cautioned my readers to check on this before putting a residential
phone number on their business stationery, brochures, business cards, or
website. I have no idea how local telephone companies are dealing with this
issue now that there are so many different options for long-distance telephone service, but in the past, a telephone company might impose a fine for improper
use of a residential number, tell the customer to stop using it for business
purposes, or simply start charging them business rates
if they discovered a customer violating the rules.
Long after I no longer needed two phone lines, I kept my business line
because I wanted to operate legally. But rates that were once $50 inched up to
$72/month over the years, and I finally decided this was just too much expense on top of my
residential phone bill of $45/month
when I was the only one using a phone. The turning point came the day I had
some line trouble and spoke with the AT&T repairman about the legality of
cancelling my business line and just using my home phone number on my website as
a contact number.
He laughed and said that a separate business line used to be "the law," but
now with so many people working at home and doing business on the Web, the
telephone company has better things to do than worry about work-at-homers who
use a cell phone or their residential number for both personal and
business use. And putting a home phone number on a website that didnít sell
products, he said, would really be insignificant to AT&T.
Actually, what AT&T and other landline telephone companies are worrying about now is the competition from
companies that are offering terrific bundled cable/Internet/phone service packages, plus services such as Magic Jack, Skype and other
(voice over IP)
services that use one's Internet connection and computer to make free phone calls
through a USB port.
I have DirecTV for my cable TV service, but I have used
Wow! as my Internet
service provider for a long time. Until I spoke with a salesperson there, I had
no idea that they could "import" whichever phone number I wanted them to use,
and I could dump both of my AT&T landlines and get everything I needed and much
more for just $12/month. Compare that to AT&Tís "unlimited long distance"
service at $30 (after taxes and other fees were added) which only gave me the
ability to call within the continental United States. And consider that I
had to renew this service package every year and hope I could keep the rate Iíd had the
year before. Then add $14/month for voice mail, and you can see why AT&T is
losing a lot of business to cable companies and cell phone providers.
I was thrilled to learn that my new phone service would give me truly
unlimited local and long distance calling not only in the continental United States,
but also Alaska, Hawaii, Canada, Puerto Rico, Guam, Saipan, Northern Mariana Islands, and
the U.S. Virgin Islands—PLUS free voice mail, various caller ID services, three-way calling, and more—all
for just $12 (plus a number of state and federal taxes amounting to about $13, just like
There is one drawback, however. When you get your
long distance service through an cable Internet provider, your telephone calls
are not itemized. That means there
is no way to know who you called, or when you made a call unless you keep a record of the
numbers called. So if you're going to use a cable service provider for
your business long-distance needs, you may want to keep a
record of calls made to business contacts (which won't be easy to remember
Landlines vs. Internet Cable Phone Services
When I realized that my phone calls would now be going out over the Internet,
I remembered all the complaints I'd heard about the quality of phone services
provided by Magic Jack, Skype, and other
VoIP providers and wondered about the quality I'd get with
my Internet cable provider. I learned that the main difference between the two
is that cable companies are the primary provider of the service, whereas all the
VoIP providers are using third-person providers, which naturally affects the
quality of the calls and the reliability of the service as a whole.
Something I didnít know until I spoke with a salesperson at Wow! was that, technically, I own the telephone wires in my home, and
that what my local telephone company was charging me for in the past was service on the line running from my
house to the pole out there on the street somewhere that connects to their
services. But now that line is connecting me to my cable company, and while calls are
going out over the Internet, they are running through the existing telephone lines in my home
instead of my computer.
At first I was concerned that by cutting both landline phones out of my life
that I would suddenly find myself without a telephone in an emergency, having
heard that a power failure would render me "phoneless." But I was assured that,
in the event of a power failure, Wow! (and I assume other cable companies as
well) has a backup power source that will be good for about four hours. Beyond
that, yes, both the Internet cable and telephone service would be gone until the
power was restored, but in that case my cell phone would probably still work
because those signals come from a satellite. The problem here for many,
however, is that they live in the wrong place. In large cities with skyscrapers,
it may be hard to get a cell phone signal at times. And if you live out in the country, there may be no
satellite signal for a cell phone, no cable company serving that area, and no high-speed Internet
provider to work with. Folks in rural areas do have a couple of options,
Wild Blue Satellite Internet.
With two telephone accounts at AT&T, I had a choice of which number I wanted
to use as my primary home and office number in the future, and I naturally took
the residential number because it was wired to ring in every room of my home, unlike the
business line which rang only in my office. When the cable company imported that
number, it automatically closed my account at AT&T, so all I had to do was call
to cancel the other account. AT&T discontinued service on both accounts on the
same day they got notice. On request, they gave me four months of forwarding
service for my old business number. All in all, a very smooth transition
especially appreciated by one who hates change.
Do You Know Who Has Your Number
and Where It Is Appearing on the Web?
In making a list of all the places on the Web where I needed to change my
telephone number, I was astonished to find
that it was appearing in connection with my name on more than 3,000 web pages,
from white pages, yellow pages, superpages, and allpages to countless other
listings on various city and state sites that provide business telephone
numbers and reverse number look-up sites. Of course NONE of
these listings were authorized by me.
Never having searched for my telephone numbers before, I had no idea that my
personal name, business name, website, and business telephone number was appearing on so many
directory-listing sites. This is just an example of how robots crawl the Web and
pick up information about us. Many of the listings for my name include a P.O.
address I stopped using in 1989. Others show my home address (which I've never
listed anywhere on the Web), and most of these listings link to a map to my front
door, something I got off Google a long time ago, but which now seems to have been a
waste of time.
Most annoying was that, years ago, someone connected my name to Loomis
Publishing in Naperville, a company I have never had an association with. I
tried repeatedly to get my name removed from the various listings that have tied
my name to this company, but it can't easily be done. After a while, I decided
it wasnít worth my time and trouble to keep trying to do this.
I have no idea what happens when a landline number is imported to a
cable company service provider, but it will be interesting to check both numbers
on the Web a year from now to see what telephone number the Web robots have picked up for my
personal and business name.
If you'd like to comment on this topic, drop me an
email, and I'll add your remarks to this article.
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