Telephone Excise Tax Refund Offered to Taxpayers in 2006

A one-time only refund is being offered on federal tax returns this year for anyone who has had any kind of phone service since March 1, 2003. The Telephone Excise Tax refund reimburses taxpayers on a tax paid for long distance telephone use, whether they used a land line or a cell phone.

The tax had been in existence for over a century on all long distance calls. The tax was based on how far away the call was that you were making; the further the distance of the call from your location, the greater the tax.

Telephone companies no longer take distance into account in calling charges, and the tax is obsolete. The federal government is offering a one-time refund over a 41-month period.

Individuals have the option of being refunded the actual amount paid, if they retained their telephone bills, or taking the standard refund. Those choosing the actual amount paid must include form 8913 Credit for Federal Telephone Excise Tax Paid with their return. Federal returns have an additional line for taxpayers who are claiming the standard refund.

The standard refund is based on the number of exemptions claimed on the 2006 income tax return. A $30 refund for a single person, $40 for those claiming two exemptions, $50 for three exemptions, and $60 for those taxpayers claiming four or more exemptions. A new form, the 1040EZ-T, is specifically intended for those who would not otherwise file a tax return to request a refund of the Telephone Excise Tax.

Businesses and non-profit organizations are allowed to estimate their refund based on two months of telephone bills, utilizing a formula provided by the IRS. They also have the option of being refunded the actual amount paid.

The government ceased collecting the tax on August 1, 2006. Refunds are being offered on taxes paid for telephone service after February 28, 2003.

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Andrew Marx writes articles on topics including personal finance and higher education, emphasizing a practical and informed approach to his ideas. His weekly column can be read at http://www.smartremarx.com/

Source: www.articlesbase.com