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.

Listen buddy, they know these things.

On Saturday a client comes in, we'll call him "Daddy," wanting to get a refund loan. In order to get a loan on your tax return, you must efile, and the efile goes through the IRS.

I was downloading communitions on the files that we've sent to the IRS, and I got a reject message for Daddy, stating that there was a discrepency with the name or social of of one of Daddy's "children." I called Daddy and found out that the LAST name we had for the "child" was incorrect. I changed that and put it through again. Got another message from the IRS stating that the birthdate was incorrect so I called "Daddy" again.

"Child's" birth year (as listed, in client's handwriting), 199x
"Child's" birth year (as CORRECTED by "Daddy"), 196x

Daddy's birth year, 196x

Man Daddy - you must have been one HECK of a playboy when you were under 10 years old.

You can lie to the tax preparers, if you don't bring in your "kids" they have no way of knowing and can only go with the information you give them.

But you can not lie to the computers. The IRS has a database that is (sometimes somewhat) in sync with the Social Security Administration.

Your *KID* is a bit older than 10. Sorry you don't get the Child Tax Credit.