Don’t Forget Telephone Tax Refund on Your 2006 Tax Return

Individual taxpayers will be able request a refund on federal excise taxes paid on long distance telephone service on their 2006 tax returns. The federal government stopped collecting these excise taxes in August 2006 and is going to refund those excise taxes billed after February 28, 2003 and before August 1, 2006. More than 146 million people are expected to file for the refund.

So, how do taxpayers go about requesting the refund? Well, there are basically two ways. By far the simplest way is to use the government standard amounts.

The standard amounts are based on the total number of exemptions claimed on the 2006 federal income tax return. For example, the standard amount of refund is $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions, and $60 for four or more exemptions. As an example, a married couple filing a joint return with two dependent children (for a total of 4 exemptions) would be eligible for the maximum standard amount of $60. All taxpayers have to do to get the standard amount will be to fill out an additional line on their regular 2006 1040, 1040A, or 1040EZ.

The specific lines are Line 71 for the Form 1040, Line 42 for the Form 1040A, and Line 9 for the Form 1040EZ.

The other way to get the refund is to use the actual amount of excise tax paid. But, to do this, taxpayers will have to go through 41 months of old phone bills for the actual amount of excise tax paid and then report this amount on Form 8913. Then, this amount is carried over to the proper line numbers noted above.

What about individuals who aren’t required to file tax returns? How do they get their refund? For people who don’t need to file a regular tax return, the IRS has developed a special shorter form , the 1040EZ-T, to allow them to request the telephone refund. This form will allow people to request refunds based on the standard amounts or the actual amounts. Copies of this form are available at www.irs.gov..

Also, be sure to check my website, www.mynetprofittools.com, every day for the latest tax filing tips that will help make your 2006 tax filing less of a headache and save you money.