Mixed use
Cell phones used for both business and personal calls require allocation. A reasonable approach: log usage for a representative two-week period and apply the resulting business-use percentage for the year. Alternatively, dedicate one phone exclusively to business and deduct 100%.
Listed property no longer
Cell phones were "listed property" subject to strict substantiation rules until 2010, when the Small Business Jobs Act removed them from the listed-property category. Substantiation is still required (Section 274(d) general rules), but the per-call recordkeeping nightmare is gone.
Phone purchase
A cell phone purchased outright is deductible (or depreciable) like other office equipment. Most phones cost less than the de minimis safe harbor threshold, so they can be expensed in full in the year of purchase.
Family plans
On a family wireless plan, allocate the cost of the business line. The standalone single-line price is often used as a proxy for the business-line cost when the family plan bundles multiple lines.
Where it goes
Schedule C line 25 ("Utilities") for the business-use portion of monthly service. Line 22 ("Supplies") for the phone hardware itself.
Where this fits in the larger Schedule C picture
Schedule C has more than two dozen named expense lines plus an "Other expenses" catch-all. For most small businesses, four or five lines drive the bulk of the deduction total — vehicle, home office, depreciation, contract labor or wages, and supplies — and the remaining lines individually contribute small amounts that nevertheless add up. Treating each named line as a recurring decision rather than an afterthought, and revisiting the categories each January, often surfaces $2,000–$5,000 in additional legitimate deductions that a less disciplined process would have missed entirely.
Documentation that survives an exam
An IRS examination of this deduction will request three things: proof of payment (bank or card statement), proof of the underlying transaction (invoice or receipt), and proof of business purpose (a contemporaneous note or calendar entry). The first two are usually trivial to produce; the third is where most filers fall short. Capturing business purpose at the moment of the expense — a one-line note in your bookkeeping software or a category and memo on the receipt-capture app — converts a generic charge into a documented deduction that will withstand scrutiny three to six years later when memory has faded.