Apr 02

Call for Refund On Phone Service Excise Taxes

You talk on the telephone, right? You can now claim a one-time deduction for those of you who paid taxes on landline, wireless or Internet phone services.

Credit this tip to Black Enterprise magazine, which is where we first read about this one-time tax refund for previously collected federal excise taxes on long-distance or bundled phone service. The refund is due because of a federal court decision that successfully challenged these excise taxes on long-distance calls, as well as taxes on plans that do not differentiate between long-distance and local calls.

According to the IRS this refund will be the most far-reaching in IRS history: more than 160 million filers may request it.

You have a choice, according to the IRS. You can take a standard refund amount of between $30 and $60, depending on the total number of exemptions claimed on your 2006 tax return. That eliminates the need to locate old phone bills. Or you can locate your bills and use the actual amount.

Even if you don't need to file a return, you can still claim the refund by attaching a Form 8913 to Form 1040EZ-T.

The IRS is already worrying about the potential for fraud, and has all sorts of tips to avoid getting ripped off. Don't believe people who try to convince you that the IRS will refund your entire phone bill. The refund is one-time only, and just for this specific excise tax on long-distance services. The IRS website has lots of links to specific forms and additional details.

Comments

  • You are correct. It is a refund.

    Apr 03
  • Dear sir or madam,

    I read the article on Refund for tax services. The article describes a "deduction" of $30 or $60. Technically speaking I think it is a credit (which is different than a deduction. A deduction may reduces taxable income to which a tax rate is applied. So if someone is in the 25% tax bracket, a deduction of $60 only yields them $60. However a credit is a dollar for dollar reduction and you get the full benefit of $60.

    Another important distinction is the deductions may not reduce your taxable income below zero. Therefore if you income is very low and your deductions are high, you may get NO BENEFIT. The credit is refundable - EVEN IF you paid no taxes during the year.

    Steve

    Apr 03