IRS to tax work cell phones: Get a life!
that the Internal Revenue Service is mulling a plan to tax employer-provided cell phones as a fringe benefit.
"The IRS is proposing that employers declare 25 percent of an employee's annual cell phone expenses as a taxable benefit," the site reports. "However, the tax collector said employees could avoid being taxed under the proposal if they were able to prove they used personal cellphones for non-work-related calls during work hours."
Holy crap. What a waste of time.
According to JD Power & Associates, the average monthly cell phone bill is $73. Twenty-five percent of that is $18.25. Multiply that by 12 months per year and you get $219 in annual fringe benefits from the use of a cell phone. For someone earning between $33,950 and $82,250, we're talking about an additional annual tax liability of $54.75.
And to collect that extra money, we're going to require employers and employees to do tons of extra paperwork, keep track of annual cell phone bills and what percent of calls are personal and which are work.
If you call a client who's also a friend and talk partly about business and partly about family, how does that break out? You could just divide it in half, but what if some of the small talk is necessary for keeping a good client relationship? So perhaps is 75% work and 25% personal? It's all very complicated.
Isn't the tax code already complicated enough? With all the cash being stuffed into companies like AIG to allow them to go on spa retreats, isn't it a little lame to start hounding the little guy over his cell phone use? It's especially stupid because we're talking about such a small amount of revenue.