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Another OT: Taxes back if you have a landline...


picker

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Guess this is my week to go off topic, but I figured most of us could use $30-$60. And hey, if you can afford to throw $30 away, PM me and I'll give you an address you can send a check to. I got my eye on a doubleneck bass, and every little bit helps...

 

This info is true according to http://www.snopes.com/business/taxes/excise.asp

 

Can only claim for 2006.

 

Pass on to as many people as possible including seniors.

 

 

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This appears to be true--check out the link below on the CNN website. If you have your taxes prepared, they'll know about it, but if you use Turbo Tax or otherwise do your own taxes, keep this in mind when you prepare. It's a one-shot deal. Additional info at http://money.CNN.Com/2006/05/25/news/telephonetax_refund/index.htm

 

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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.

 

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:If 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.

 

 

 

Feel free to pass this on, make copies for family and friends who don?t have computers.

Always remember that you are unique. Just like everyone else.

 

 

 

 

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I keep all my records and receipts seven years back because I'm some kind of idiot. I'll certainly use the tax credit. Thanks for the heads up Picker. I would think Turbo Tax would pick up on that, but who knows.

Age is taking away most of my deductions. I'll be able to itemize yet for a couple years or so. Three of our four kids have moved out and are supporting themselves. Our house is getting paid down at a rapid rate and the interest is less and less. Unlike some previous years, I don't have a small business on the side to write off.

Oh well. I'd rather be debt free than worry about refunds.

bbach

 

Beauty is in the eye of the beer holder.

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Thanks, Picker!

 

And one of the most salient points is that this is a tax credit. In case some people missed this most important point in your full explanation, tax credits are (and this is quoted from the IRS website) dollar for dollar reductions of tax owed. A $30 tax credit means your tax bill is $30 lighter or, if you've overpaid during the year, your return is $30 more.

 

If this were a write-off on earned income, the difference would be negligible to most people's tax returns. ;)

It's easiest to find me on Facebook. Neil Bergman

 

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