| Author | Message | ||
     Crusty |
(Why didn't the phone companies tell us about this, duh!) 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 ho w 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 $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 att ach 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. Feel free to pass this on or make copies for family and friends who don't have computers | ||
| Iamike |
Thanks Crusty, First a drain plug, then Newfie t-shirts and now this. Next time we get together I'm taking you out for a steak. You do eat steak don't you? Mike | ||
| Crusty |
I most definitely eat steak. And I would enjoy a nice steak dinner. However, I don't think you'll get the opportunity until the 25th Anniversary in '08. And you don't need to feel obligated to me either. I do what I do because it makes me feel good. Do you drink coffee? | ||
| Iamike |
If I could finagle another trip out East I'd drop in and take you up on it. My wife said that I can't come out there again until she can come too. Since she started a new job this summer probably won't work. My son has been going out to Colorado for the summer and most likely will again this year. It's pretty hard to pass up an excuse to go ride in the Rockies when I get the chance. He will be going out there at the same time as the Homecoming but in '08 he'll be graduating so it may open up that weekend. |
