The CRA allows you to deduct a reasonable portion of your cellphone bill as a business expense. This is something that you might have realized, but did you know that you may also be able to deduct your spouse’s cell phone bill?

Now, this isn’t going to apply to everyone, but many couples work together to build their family-run businesses, yet time and time again I see business owners do not have any documentation to support the fact that their spouse is involved.

Let’s take an example:

Liam and Becky are common-law partners. Liam is building a virtual coaching business and it’s doing very well. He’s struggling to keep up with some of the administrative tasks, so he asks Becky to help. Becky starts to call some of the suppliers to deal with these administrative tasks using her personal cellphone.

Tax season comes around, and they decide to claim both their cellphones. One day, a CRA agent asks them for the supporting invoices, and denies the cellphone expense for Becky, explaining that there is no evidence to support that she did any work for the business.

So how can we get some proof? Liam could email Becky the specific tasks he has asked her to do. Even better, Liam could create a business email address for Becky, and have her send emails with a signature at the bottom that includes the phone number. Now there is lots of evidence to show that a portion of Becky’s phone bill is deductible.

 

– Daniel