KC//CRIMSON
2/22/2007, 08:48 AM
2006 Rebates for tax overpayment on phone bills.
http://www.snopes.com/business/taxes/excise.asp
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 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 beg an 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 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 $5 0 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, 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.
http://www.snopes.com/business/taxes/excise.asp
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 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 beg an 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 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 $5 0 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, 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.