Tax Tips

[Guardian Angel]

Snopes has confirmed this as TRUE.
http://www.snopes.com/business/taxes/excise.asp

TAX REFUND. PLEASE COPY FOR FAMILY MEMBERS & FRIENDS!!!!

Tax refund on your phone bill. Print this out and put in 2006 tax return
folder. It is an easy $30 to $60.When it comes time to prepare and file
your 2006 taxreturn, make sure you don't overlook the "federal excise
tax refund credit." You claim the credit on line 71 of your form 1040. A
similar line will be available if you file the short form 1040A. If you
have family or friends who no longer file a tax return AND they have
their own landphone in their home and have been paying a phone bill for
years, make sure they know about this form 1040EZ-T.  What is this all
about? Well the federal excise tax has been charged to you on your phone
bill for years. It is an old tax that was assessed on your toll calls
based on how far the call was being made and how much time you talked on
that call. When phone companies began to offer flat fee phone service,
challenges to the excise tax ended up in federal courts in several
districts of the country. The challenges pointed out that flat fee/rate
phone service had nothing to do with the distance and the length of the
phone call. Therefore, the excise tax should/could not be assessed.
The IRS has now conceded this argument. Phone companies have been given
notice to stop assessing the federal excise tax as of Aug 30, 2006. You
will most likely see the tax on your September cutoff statement, but it
should NOT be on your October bill.  But the challengers of the old law
also demanded restitution. So the IRS has announced that a one time
credit will be available when you and I file our 2006 tax return as I
explained above. However, the IRS also established limits on how BIG a
credit you can get. Here's how it works.If you file your return as a
single person with just you as a dependent, you get to claim a $30
credit on line 71 of your 1040. If you file with achild or a parent as
your dependent, you claim$40.  If you file your return as a married
couple with no children, you claim $40.  If you file as married with
children, you claim $50 if one child, $60 if two children.  In all
cases, the most you get to claim is $60 - UNLESS you have all your phone
bills starting AFTER Feb 28, 2003 through July 31, 2006 (do not use any
bills starting Aug 1, 2006.), then you can add up the ACTUAL TAX AS IT
APPEARS ON YOUR BILLS AND CLAIM THAT FOR A CREDIT.  Now if you have your
actual phone bills and come up with an ACTUAL TAX AMOUNT, you cannot use
line 71 on your tax return. You have to complete a special form number
8913 and attach it to your tax return. Individuals using the special
from 1040EZ-T will have to attach this form 8913 also. One final point-
this credit is a refundable credit. That means you get this money, no
matter how your tax return works out. If you would end up owing the IRS
a balance, therefund will reduce that balance you owe. If you end up
getting a refund, the credit will be added and you get a bigger refund
by that $30 to $60, depending on how many dependents are on your return.

Feel free to pass this on or make copies for family and friends who don't have computers."You may just be one person-but to one person you may be the world."




 

[Butterfly]

My hubby is working on our taxes.  He files them on line.  He just said this evening that a $40 tax credit for long distance came up when he answered one of the questions.

[hsemgr1]

Does anyone know of or have a link to a list of things you can deduct from your taxes?  Ive tried looking but cant seem to find that "magic list" if such exists.  Seems each item is listed on a seperate page and you have to read through the rest of the page and figure it out.  Guess they dont want to make things that easy.

[Bingo]

this doesn't answer your question, but if you do the taxes online, you will be prodded about deductions.  Most of the programs are really good about pointing out deductions and asking if you can take this one ...

We don't have our W-2's yet.  Or much of anything else that we need to file.

[Butterfly]

Consumers, businesses can get refunds on phone excise taxes

Everyone likes a little extra money, and just about everyone can get at least $30 this year by checking a new line on the federal income tax form.

The money — a credit or refund on this year's taxes — is available because of lawsuits filed by businesses around the country who successfully challenged a federal excise tax on long-distance phone bills.

The tax was supposed to be for telephone charges based on time and distance, but the practice by cell phone companies of charging the same for all calls put the tax in question. Federal judges ruled that the tax was unconstitutional, so the government decided to eliminate the tax last summer.

The government also agreed to offer up to $15 billion in credits or refunds of the tax collected during a 41-month period, Feb. 28, 2003, to Aug. 1, 2006. The credit is available only on 2006 federal income taxes. Even people who make too little to file income tax returns can get the money by filing a special form.

Story

[Butterfly]

Ignore last week's columm. Here's my new advice on the phone tax refund: Take the IRS's money and run

After collecting more than $15 billion in illegal taxes from us, the Internal Revenue Service wouldn't answer a simple question for Debry LaNear:

Which of the many taxes listed on her old phone bills is the one the government is refunding?

LaNear isn't alone. After last week's column, some three dozen consumers called to say they also couldn't find a long-distance "federal excise tax'' on their phone bills.

The government is refunding the phone tax via your income tax this year. One option is to add up how much you paid during the 41-month period eligible for the refund.

But first, you have to locate those old bills and find the right line with the right tax.

LaNear, a paralegal from St. Charles, finally gave up trying to decipher her bills and called AT&T, her phone company. She asked: Which line is the excise tax?

"They said they were not at liberty to give me that information — it was not legally something they could give me over the phone."

An AT&T spokesman said "the best source" is the IRS or a tax professional.

Story

[Butterfly]

The IRS wants to give you more than $4,500 — if you qualify

It's true: The Internal Revenue Service really does want to give some money away.

The nation's tax-collection agency, often the target of criticism this time of year, wants to hand out billions of dollars to some hard-working, deserving taxpayers who have had the bad fortune not to earn very much.

When Richard Nixon was president, he wanted to create a "negative income tax," which would help working low-income people get ahead. His successor, Gerald Ford, signed the concept into law in 1975.

The IRS website notes that the law was intended to relieve the burden of Social Security taxes and to provide an incentive for people to work.

The concept seems to be working these days, though not as well as the IRS would like. Congress has taken another look and decided the law was failing to reach enough low-income people. Not enough working poor were claiming the Earned Income Tax Credit.

The IRS has taken the initiative to get the word out. The agency has been sending e-mails and releases to reporters, editors and producers in hopes they will pass along phone numbers and encourage more people to take advantage of this unusual program.

Story