Why the Phone Bill Isn't Fully Deductible
If you coach clients over the phone, text check-ins, or run your Kajabi funnel from your mobile device, that phone is a legitimate business tool. The IRS lets you deduct the cost of a phone used for work, but only the portion actually used for business. This is called the business-use percentage, and it applies to your monthly service plan, the phone itself if you bought it outright, and any related accessories.
Most health coaches use one phone for everything: client texts, Instagram DMs about their program, personal calls to family, and Netflix on the treadmill. Because of that mixed use, you cannot write off 100% of the bill unless you have a second phone dedicated solely to coaching.
How to Calculate the Business-Use Percentage
There is no single IRS-mandated method, but you need a reasonable, defensible number. Common approaches:
- Track your call and data logs for a typical month and calculate what share relates to client sessions, coaching platform notifications, and business email.
- Estimate based on how your day actually runs, for example if you spend roughly half your working hours on client-facing communication versus admin, personal, or offline time.
- Keep a simple log for a few weeks each year as a sample, then apply that percentage going forward until your usage changes significantly.
Say your monthly phone bill is 100 dollars and you determine 60% of your usage is business related. You deduct 60 dollars a month, or 720 dollars for the year, on Schedule C under "Other Expenses" or as part of your utilities/communication line item, depending on how you categorize it.
What Else Counts as Part of the Phone Deduction
The deduction isn't limited to your monthly carrier bill. You can also apply the same business-use percentage to:
- The cost of the phone itself, if purchased outright rather than financed through a carrier plan (this may need to be depreciated or expensed under Section 179 depending on cost and use)
- A phone case, screen protector, or car mount you bought specifically to support client calls
- Paid apps or services tied to running your coaching business from your phone, such as a scheduling app or a client messaging tool
If you buy a completely separate phone and line used only for coaching, that changes the math: the entire bill for that line becomes a 100% deductible business expense, and you avoid the guesswork of estimating a percentage.
Where This Fits on Your Tax Return
As a self-employed health coach filing a Schedule C, your phone deduction reduces your net business income, which in turn lowers both your income tax and your self-employment tax calculated on Schedule SE. This matters more than people expect: shaving off even a modest, legitimate expense like a phone bill lowers the 15.3% self-employment tax hit as well as regular income tax.
Keep your bills and whatever usage log or percentage justification you used in case of an audit. You don't need to submit this documentation with your return, but you need it on hand if the IRS asks how you arrived at your business-use percentage. A consistent, reasonable method applied year over year is far more defensible than an arbitrary round number with no backup.