TODAY'S TAX TIP - TETR

I'll include the information from the IRS website for those that are into details, but I'll give the short and sweet explanation up front.

For Tax Year 2006, there is a one time payment available for previously collected long distance telephone taxes.

WHAT THIS MEANS - someone screwed up and charged taxes on long distance phone calls and now *YOU* get the money back.

This only applies to taxes on long distance phone calls. *IF* you are cell phone only and have a nationwide calling plan -- it does not apply. This is only if you have a LANDLINE (you remember landlines -- those are the things that are plugged into the wall in your kitchen - you use it twice a year, once on Mother's Day, and once to call Aunt Matilda on Easter).

WHAT YOU CAN DO -- you can take the standard refund (from $30 - $60 depending on the number of exemptions you have) *OR* you can go through all your telephone bills from February 2003 through August 2006 to find out what taxes you paid. So far, from all the people we've seen in our office, everyone has chosed to take the standard refund (nobody seems to want to dig through old phone bills - not that I blame them).

I assume that most standard tax prep software has a place where you can click to get the standard deduction -- if you are using software and it does *NOT* have an option for this, go get yourself some new software.



The following is from www.irs.gov

Telephone Excise Tax Refund

The Telephone Excise Tax Refund (TETR) is a one-time payment available on your 2006 federal income tax return. It is designed to refund previously collected long distance telephone taxes. Individuals, businesses and tax-exempt organizations are eligible to request it.

To make the refund easier to figure, the IRS established a standard refund amount, based on personal exemptions, ranging from $30 to $60. If taxpayers have phone bills and other records, they can request the actual amount of excise tax paid. Though using the standard amount is optional, it is easy to figure and approximates the eligible amount for most individual taxpayers. You only have to fill out one line on your return, and you don’t need to present proof to the IRS.

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.
Choosing the standard refund amount? You’ll find an extra line on your tax returns for the refund.
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 return.
Don't need to file a 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. Attach Form 8913 to Form 1040EZ-T if you use the actual amount. Also, some companies offer free e-filing of Form 1040EZ-T.
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.