Telephone Excise Tax Credit - Updated

On your 2006 tax returns, all taxpayers, over 18 and not claimed on another person’s tax return, will be entitled to claim a credit for taxes paid on long-distance telephone calls. The credit is $30 for taxpayers with one exemption (single with no children), $40 for two exemptions, $50 for three exemptions, and $60 for four or more exemptions.

Update for Individuals:

 
Taxpayers have a choice: a standard refund amount between $30 and $60, based on the total number of exemptions claimed on their 2006 tax return, to eliminate the need to locate old phone bills; or they can locate those bills and use the actual amount.

If you Find those old phone bills you can figure the refund using the actual amount of tax paid. Fill out Form 8913, Credit for Federal Telephone Excise Tax Paid, and attach it to your Income Tax Return.

If you don't need to file an Income Tax Return you can still request the refund. Use the new Form 1040EZ-T, Request for Refund of Federal Telephone Excise Tax, to choose the standard amount and attach Form 8913 to Form 1040EZ-T if you use the actual amount.

If you have a small business and you are filing Schedule C, E or F you may be eligible to use the special formula for businesses if you have more than $25,000 in gross receipts. SEE NOTE BELOW!

The standard amount is not available to businesses and nonprofits. Businesses and non-profits must fill out Form 8913 and base their refund requests on the actual amount of tax they paid. Businesses should attach this form to the income-tax returns they normally file — Form 1120, 1120S, 1065 or 1041. Nonprofits, including churches, charities and other tax-exempt organizations, should attach it to Form 990-T.

Tax Tip

Businesses and tax-exempts can review their bills for 2 months and use a special formula to figure the refund. This method could provide you with a larger credit. Additional information can be found on the IRS’s website:www.irs.gov/newsroom/article/0,,id=161506,00.html

Take Note

• Some taxpayers have requested large and apparently improper amounts for the telephone tax refund. Use caution when figuring your actual amount of tax paid. See the IRS's news release IR-2007-16 for more detailed information
• Check our web site often for the latest updates on refund requests and tax related information!