IRS crediting $30 - $60
You may have heard or noticed that, beginning this past August, the long distance portion of your phone bill is no longer being taxed. Originally this 3% tax on long distance phone calls was instituted to help finance the Spanish-American war. The war ended in 1898, but the tax did not until it was recently ruled illegal. On your 2006 tax return you will be able to claim a credit for the past 3 years' worth of taxes, without having to do any research or provide any back-up paperwork.
The IRS will refund to you the taxes on long-distance service billed between March 1, 2003 and July 31, 2006. Why those dates? According to the IRS: "Under the applicable statute of limitations in the Internal Revenue Code, the IRS is generally not permitted to refund taxes that were paid more than three years before the date on which the refund program was announced."
If you choose to take the easy route (or perhaps more profitable route) of not looking through all your old phone bills, you can claim the standard refund amount according to the number of exemptions claimed on your upcoming tax form:
• one exemption: $30
• two exemptions: $40
• three exemptions: $50
• four exemptions or more: $60
A taxpayer will be able to claim this money without itemizing, and by using any of the 1040 forms (1040, 1040A 1040 NR, or 1040EZ). Even if you do not file, you can send in a 1040EZ-T to claim the credit.
If you wish to get a credit for the actual 3% tax amount you paid, you can fill out the yet unreleased form 8913.
The only long distance either my husband or I have paid, I believe, was when he split his phone bill with an old roommate, under the roommate's name. But he did pay long distance tax, and that's the only requirement the IRS lists as I interprete it. However, not all guidelines for this credit have been finalized yet, so make sure to read the instructions when filing.
There's more information on this tax credit here.
"The nation should have a tax system that looks like someone designed it on purpose." -William Simon
The IRS will refund to you the taxes on long-distance service billed between March 1, 2003 and July 31, 2006. Why those dates? According to the IRS: "Under the applicable statute of limitations in the Internal Revenue Code, the IRS is generally not permitted to refund taxes that were paid more than three years before the date on which the refund program was announced."If you choose to take the easy route (or perhaps more profitable route) of not looking through all your old phone bills, you can claim the standard refund amount according to the number of exemptions claimed on your upcoming tax form:
• one exemption: $30
• two exemptions: $40
• three exemptions: $50
• four exemptions or more: $60
A taxpayer will be able to claim this money without itemizing, and by using any of the 1040 forms (1040, 1040A 1040 NR, or 1040EZ). Even if you do not file, you can send in a 1040EZ-T to claim the credit.
If you wish to get a credit for the actual 3% tax amount you paid, you can fill out the yet unreleased form 8913.
The only long distance either my husband or I have paid, I believe, was when he split his phone bill with an old roommate, under the roommate's name. But he did pay long distance tax, and that's the only requirement the IRS lists as I interprete it. However, not all guidelines for this credit have been finalized yet, so make sure to read the instructions when filing.
There's more information on this tax credit here.
"The nation should have a tax system that looks like someone designed it on purpose." -William Simon
Labels:
Saving Money,
Taxes
1 comments:
Thanks for writing such a nice post on the IRS refund for our phone bills. We have bookmarked this post, shall use it to claim a refund when we do our taxes for 2006 :)
Cheers,
FIREFinance
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