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Want to be a part of probably the most wide-reaching tax refund – and of course, save money at the same time? Well, the Telephone Excise Tax is a one-time tax refund only offered for the 2006 tax year.
The Telephone Excise Tax refund is one tax deduction most people probably haven’t heard of before – and for a good reason. This is the only year it’s offered. So let’s take advantage of it!
This purpose of this tax refund is to refund previously collected long-distance telephone taxes. Everyone from individuals to business to not-for-profits can benefit from this refund.
On your 2006 tax return, all taxpayers are going to be given a choice of using a standard deduction or your actual long-distance telephone taxes (which would require digging up your old phone bills). The standard deductions are either $30 or $60, depending on the number of deductions you are already taking on your return.
If you are using the standard deduction, there will be an additional line on the 2006 tax return to include your applicable deduction. If you choose to use the actual amount of your long distance telephone taxes, you will need to fill out Form 8913 (.pdf) from the IRS.
Businesses, like individuals, also have 2 options:
1. Go through your old telephone bills for the past 41 months to calculate the actual amount of long distance telephone tax paid; or
2. Review your telephone bills for the past 2 months and calculate the refund using a special tool on the IRS website
One warning – do not claim all the telephone taxes. It is only the long-distance portion of the taxes. Additionally, there have already been cases of people claiming too large of a deduction and the IRS is catching them. So the bottom line is… do not abuse this!!
That being said, the Telephone Excise Tax refund is an easy way for individuals and businesses to save a few dollars. So spread the word since most everyone is eligible.
Very few people use the words fun and taxes together… and don’t worry, I’m not one of them. I hope to make taxes easier to understand and less of a hassle. I am a CPA with a Master’s in Accounting, and I’ll do my best to help explain many of the tax options available today.