FYI for you or anyone
you'd like to forward it to. I know it's just $30 Or
$60, but every little bit counts. Print this out and put in 2006 tax
Return
folder. Here is the information on it from the IRS
Subject: Phone Tax Credit
http://www.irs.gov/newsroom/article/0,,id=161506,00.html
Subject: Print this out and put in 2006 tax return folder. It is an
easy $30
to $ 60.
A SPECIAL ONE TIME TAX CREDIT ON YOUR 2006 TAX RETURN When it comes
time To
prepare and file your 2006 tax return, 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 land phone 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 charge
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.
F you file with a child 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 our tax retu RN. 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, the refund 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.
Classification: UNCLASSIFIED
Caveats: NONE
