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article imageObama to tax business cellphone use, move affects millions

By Michael Krebs     Jun 12, 2009 in Business
In a move that will affect income taxes for millions of American workers, the Obama administration and the Democratic legislative branch are planning to implement taxes on business cellphone usage.
Those business calls you make from your cellphone in the airport are now going to cost you personally - on your income taxes - thanks to new Internal Revenue Service plans initiated by the Obama administration and the cooperative Democratic congressional institution.
A new IRS designation, reported in The Wall Street Journal on Friday, will define business cellphone usage as a "fringe benefit" for employees.
The move allows employers to assign 25% of employee's annual cellphone/data expenses as a taxable benefit.
"Under that scenario, a worker in the 28% tax bracket, whose wireless device costs the company $1,500 a year, could see $105 in additional federal income tax," WSJ reports.
The IRS issued a notice this week, noting that employees could avoid the tax penalty if they can demonstrate that they used personal cellphones for nonbusiness calls during working hours.
The new tax move comes amid discussions in the Obama administration and Democratic circles in congress on the designation of healthcare benefits as a taxable item for employees.
More about Obama, Taxes, Cellphone, Business, Mobile phone
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