Pick up your phone and look at your screen-time report. Most of us would rather not. Somewhere in there are the client calls, the invoices sent from a parking lot, and the Slack thread that saved a project. Somewhere else in there are the forty minutes you lost at 1 a.m. to videos of strangers renovating houses. Here's the uncomfortable part: if you had to tell the IRS what share of that device is "business," you'd almost certainly get the number wrong. That's not because you're dishonest. It's because your memory picks which minutes count, and it is not neutral about it.

Freelancers ask whether they can deduct their phone and internet all the time, and the short answer is yes. The deduction is real, ordinary, and allowed. The more useful answer is about the number you put next to it. That number is the business-use percentage, and most people make it up. Usually they guess high. Sometimes, out of fear, they guess low, or claim nothing and pay tax on money they didn't need to.

This piece covers one idea: how to replace a feeling with a measurement you can stand behind.

The rule itself is simple

Under the tax code, a self-employed person can deduct expenses that are "ordinary and necessary" for their business. A phone and an internet connection easily meet that test for nearly any freelancer. The catch is that most people use the same phone and the same Wi-Fi for everything else in their lives too. When something is used for both business and personal purposes, you deduct only the business portion.

A few details are worth knowing:

  • A dedicated business line is fully deductible. If you pay for a second phone or a second number used only for work, you can deduct the whole cost.
  • The first landline in your home is not. The tax code specifically excludes the basic monthly charge for the first telephone line into a residence, even if you work from home. Separately itemized business charges on that line, like business long-distance calls, can still be deducted.
  • Cell phones are no longer "listed property." A 2010 law removed them from the category that requires strict, item-by-item logs, so you don't need to record every call. You still need a reasonable, documented basis for your percentage. Removing the logbook requirement didn't remove the need for evidence.
  • The device and the service are separate. Your monthly plan and internet bill are ordinary expenses. The phone itself is equipment. Under the de minimis safe harbor election, many freelancers can write off an item costing $2,500 or less in the year they buy it, multiplied by the same business-use percentage.

None of this is controversial. The trouble starts when you try to come up with the percentage.

Why your gut says 80%

Ask a freelancer what share of their phone use is for work and you'll often hear a confident round number: 70, 80, sometimes 90. Ask them to prove it and they go quiet.

Two well-documented mental habits are at work here. The first is the availability heuristic, a term from Amos Tversky and Daniel Kahneman's research on judgment. We estimate how often something happens by how easily examples come to mind. Work moments on your phone are vivid. There's the call where you landed the retainer and the frantic email before a deadline. They have stakes, so they stick. The idle scrolling, the group chat, and the weather check barely register. They take up hours but leave almost no memory, so they don't feel like much.

The second is motivated reasoning: when we have a stake in the answer, we're better at finding evidence for the conclusion we want. A higher percentage means a smaller tax bill, and your mind knows it. Nobody has to decide to cheat. The estimate drifts toward the convenient number on its own, and it feels honest the whole way there.

The opposite failure is just as real and gets less attention. Some freelancers are so afraid of an audit that they claim nothing. That also comes from feeling rather than fact. Fear produces its own distortion, and it costs actual money every year.

In both cases, a sensation is standing in for data. The fix is to stop estimating and start sampling.

Measure a representative slice, not the whole year

You don't need to log your phone use for twelve months. For vehicles, IRS rules have long accepted a sample: if you keep good records for a representative part of the year, you can use that to support the whole year's business percentage, as long as the sample really reflects your typical pattern. Phones no longer fall under those strict vehicle-style rules, but the same reasoning gives you a sensible, defensible method.

In practice:

For your phone. Pick a typical stretch of time. Avoid your slowest month and the week of a giant launch. Your phone already tracks screen time by app, and your carrier bill lists calls and data. Sort each into business and personal. Email, client messaging apps, your invoicing tool, calls with known clients, and work-related browsing count as business. Social media, games, streaming, and personal texts don't. Count only actual business use. "I could get a work call at any moment" doesn't make idle time business time.

For your internet. Exact measurement is harder because the bill covers everyone in the household. One reasonable approach is to compare your working hours online with total household internet use. A partner streaming every evening and kids gaming after school will lower your share. Living alone and working full-time from home will raise it. Some routers show usage by device, which helps. The point isn't precision. The point is that you can explain how you got the number.

Whatever method you use, write it down when you do it, not when an IRS letter shows up three years later. One paragraph saved with your tax records is enough: "Reviewed screen time and carrier records for the first two weeks of March; 58% of active phone time was client communication, invoicing, and work research." That one paragraph is what turns a guess into a record.

What a defensible number feels like

Something interesting happens when people actually do this. The measured number is usually lower than what they'd have guessed, though rarely by a ridiculous amount. More importantly, it feels different. A guessed 80% sits in the back of your mind as a small, steady worry. A measured 55%, with a note explaining it, just sits there being true.

That difference matters more than it seems. Freelancers carry a lot of low-level money anxiety, and much of it comes from not knowing whether a number would hold up. Replacing vague figures with sourced ones, even modest ones, is one of the more reliable ways to make tax season feel like paperwork instead of a reckoning. You give up a few points of deduction and get back some peace of mind. For most people that's a good trade.

It's also worth redoing the measurement when your life changes. You might move from a coworking space to a home office, or your household might grow. A percentage that was true two years ago may not be true now, and updating it is part of keeping it honest.

Your next moves

  • Open your phone's screen-time report today and go through the past seven days by app. Total up the clearly business apps and divide by total active time. Write down the raw percentage before you round anything.
  • Pull last month's carrier bill and internet bill and put both monthly totals in a note or spreadsheet, so you're multiplying your percentage by real dollar amounts and not a remembered figure.
  • Write a three-sentence method note. Say what period you sampled, which records you used, and what you counted as business. Save it in the same folder as this year's tax documents.
  • If you bought a phone, laptop, or router this year, find the receipt and record the price and purchase date. Then check whether it falls under the $2,500 de minimis threshold so you know whether you can expense it in full this year, multiplied by your business-use percentage.
  • Put a calendar reminder for six months from now to redo the sample, especially if your work setup or household has changed.

Where Payday fits

All of this comes down to replacing a feeling about money with a number you can trust, and the same idea applies to the bigger tax question freelancers lose sleep over, which is what they'll owe each quarter. Payday connects to your Stripe account and bank, works out your Q1–Q4 estimated tax payments from what you actually earned, reminds you before each deadline, and exports a TurboTax-ready file when the year is done. Once you've measured your phone and internet percentage and have the deductions sorted, you can let Payday handle the rest of the arithmetic and spend less of the year wondering what you owe.