have you used long-distance in the last 3 years? federal excise tax CREDIT on your 2006 tax return!

[unblock]

this has been posted here before, but for those who haven't heard, the federal excise tax that used to ding your long-distance or cell phone bill is no more. what's more, the irs is refunding the credit back to march 2003.

http://www.irs.gov/newsroom/article/0,,id=161506,00.html

if you want to take the easy way out, you can get $30, $40, $50, or $60 just based on the number of exemptions you have (1, 2, 3, or 4+). no receipts, no fuss, no muss.

if you do take the time to dig out your old phone bills, you can get a credit for the actual amounts PLUS INTEREST (see form 8913.) some phone companies are making old bills available online (at&t residential service, e.g.).

i dug up all my old bills and my credit is a whopping $227!!


note that i'm not a tax guru, i'm just a happy turbotax user....

[Debau2005]

1. YIPEE

I have done my taxes and was pleased with mine as well. I am also a first time home buyer, so I was VERY pleased.

[unblock]

3. ah, the joys of home ownership!

that reminds me, i need to do some grout repair and recaulking around the shower today....

[MilesColtrane]

2. Thanks for this info.

I wasn't aware of it.

[badgerpup]

4. K & R

Here's the deal...
Snopes on One Time Federal Excise Tax Credit (Telephone)
Status: True.
Example:

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 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 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 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.

******
If you ask your phone company, they'll send you your records for the time involved
HOWEVER... unless your phone bill looks like the national debt, you may be best off just taking the default amount. Excise tax runs 3%...and you'll have to go through EACH AND EVERY bill...adding up $.38 her and $.65 there.


:kick:

[ima_sinnic]

5. note to BellSouth users

I didn't realize (until I read the OP!) that the phone company might actually be able to give me records going back that far. I assumed that must be too old. But I just checked their website and they do include information about the tax credit in the FAQs and mention that "Past bills may be obtained by calling 1-888-757-6500" (which is their regular customer service number)

http://faq.bellsouth.com/bellsouth/index?page=show_faq&id=010045528780010f866d1f30006160
http://faq.bellsouth.com/bellsouth/index?page=show_faq&id=010045528780010f866d1f30006148

Will be calling them on Monday to see ...

[mchill]

6. Which lines does one use from their old bills?

I was able to download my old telephone bills from AT&T (including SBC bills, before they merged), but can anyone help, which items constitute the Federal Excise Tax (FET)?? There isn't one line that says FET.

[unblock]

7. there should be either one or two lines that say "federal taxes"

or something close to that.

now the only complicated part is that the credit is for the federal tax on LONG-DISTANCE, not for local service. so if you have local service only, you're out of luck (well, you didn't pay the tax in the first place, so).... if your phone bill breaks out long-distance vs. local in two sections, use the federal tax line that relates to long-distance and ignore the line that relates to local service.

finally, if you the federal tax line covers both local and long-distance service, there's a section of the form for "bundled" service.

[mchill]

8. There are several federal charges, but nothing that stands out

Under

Surchargers and Other Fees:
7. Federal Subscriber Line Charge $4.38
10. Federal Universal Service Fee $0.44

Government Fees and Taxes:
17. Federal $0.70


It seems the $0.70 is it?? On my SBC, as opposed to AT&T it is listed - and $0.70 looks about it. Ok, $30 is the standard dedcution for a single person??? 41 months time $.70/month = $28.70

What I can't quite understand is why a family would get twice as much. I have a lot more time to talk on the phone as a single person - in fact, I couldn't imagine spending anymore time doing that. Another thing singles get the shaft on?

[unblock]

9. looks like the $0.70.

as for families, mrs. unblock and i have a regular phone and we each have cell phones, and our families are scattered across the country and the u.k. the tax on cell phone usage is entirely long-distance because there is no "local" service.

the flip side, of course, is that you can imagine how outrageous our phone bills have been if we've paid $227 just in federal excise taxes....

[ourbluenation]

10. So, I just went thru my old mci bills online, only 2006 available and

it's specifically listed as "federal Excise Tax", twice, for local and for long distance. Together, that's averaging about $3 total per month. This credit is for 41 months so just for our land line it's twice as much as the stardard deduction would be for our family of four. Our cell phone service is verizon and their online bills end right at the cut off for when they stopped charging it...August. Bummer. You can order old bills but they're $5 - $6 each and can take 4 months to obtain. Too bad you can't just call them up and ask how much did I pay for this tax for 41 months. Ah well.

[unblock]

12. the tax on local services is not eligible for this credit

it's only for the federal excise tax on long-distance.

once in a blue moon, it pays to be a packrat. 41 months times 3 phones = 123 bills, and i'm only missing 2 (and i think i know where to look for those :)

[ourbluenation]

11. I just looked at the form itself for itemizing...it looks to me like you can ask the phone

service to credit your account for the charges for the 41 months. If you go that route you can't obviously ask for the refund from teh IRS, but if you don't have your old bills maybe thats a way to go.

It basically says that by filing out this form you are certifying that you have not, or will not ask for a credit for the (erroneous) tax from your provider. Therfore, you must be able to ask the phpone company for a credit...anyone else read it that way?

[unblock]

13. that's correct as far as the irs is concerned.

whether or not your phone company will play ball is another story, but worth a shot.

[ourbluenation]

14. I'm on with verizon right now and requesting the tax be credited back

to me - cus serv gal didn't know what the hell I was talking about - she's checking with her supervisor.

still on hold....

[ourbluenation]

15. she said no - getting a supervisor.

stay tuned.

[ourbluenation]

16. supervisor befuddled - says I couldn't get all the past bills anyways

even if I wanted them, for all 41 months - they only go back this year.

back on hold....

[ourbluenation]

17. Verizon doesn't want to play. will not credit back my account for the erronous tax

sonsabitches

i think that's jacked up.

[unblock]

18. well i'm not sure i can blame the phone companies on this one

i have no idea how it works -- if they refund you, does the phone company get a refund from the irs? i guess they must, otherwise why would they....

but what a pain for them to administer. which is probably why they are just letting the customers figure it out themselves -- or pay $5 per bill for a copy....

[MilesColtrane]

19. Can't we just ask the NSA, FBI, or Pentagon for our records?

I'm sure they're keeping track of our LD calls.

[Tess49]

20. I'm on the phone with Cox Communications in Oklahoma

Asking why they are still charging federal excise tax on phone service. Rep asks me if I have some kind of exemption or something. I try to explain. He's off to speak with his supervisor. Doesn't know what the hell I'm talking about.

[unblock]

21. i don't know about your particulars, but the federal excise tax is still legal for LOCAL service

or, if, for some strange reason, your provider actually still charges long distance by the mile.

[Tess49]

22. Yes, that's what they told me. I looked at a bill from a year ago

and they lumped the local and long-distance exise tax together. So, I thought they were still charging for long distance. My mistake.