Special one-time tax credit on 2006 tax return

SPECIAL ONE TIME TAX CREDIT ON YOUR 2006 TAX RETURN



Verified by Snopes.com, so it's for real and confirms this one-shot

Special -- interesting:



When it comes time to

Prepare and file your 2006 tax return, make sure you don't overlook

The "federal excise tax refund credit." You claim the credit on line

71 of your form 1040. A similar line will be available if you file the

Short form 1040A. If you have family or friends who no longer file a

Tax return AND they have their own land phone in their home and have

Been paying a phone bill for years, make sure they know about this

Form 1040EZ-T.



What is this all

About? Well the federal excise tax has been charged to you on your

Phone bill for years. It is an old tax that was assessed on your toll

Calls based on how far the call was being made and how much time you

Talked on that call. When phone companies began to offer flat fee

Phone service, challenges to the excise tax ended up in federal courts

In several districts of the country. The challenges pointed out that

Flat fee/rate phone service had nothing to do with the distance and

The length of the phone call. Therefore, the excise tax should/could

Not be assessed.



The IRS has now

Conceded this argument. Phone companies have been given notice to stop

Assessing the federal excise tax as of Aug 30, 2006. You will most

Likely see the tax on your September cutoff statement, but it should

NOT be on your October bill.



But the challengers of

The old law also demanded restitution. So the IRS has announced that a

One time credit will be available when you and I file our 2006 tax

Return as I explained above. However, the IRS also established limits

On how BIG a credit you can get. Here 's how it works.




If you file your

Return as a single person with just you as a dependent, you get to

Claim a $30 credit on line 71 of your 1040.





If you file with a

Child or a parent as your dependent, you claim $40.




If you file your

Return as a married couple with no children, you claim $40.




If you file as married

With children, you claim $50 if one child, $60 if two children.






In all cases, the most

You get to claim is $60 - UNLESS you have all your phone bills

Starting AFTER Feb 28, 2003 through July 31, 2006 (do not use any

Bills starting Aug 1, 2006.), then you can add up the ACTUAL TAX AS IT

APPEARS ON YOUR BILLS AND CLAIM THAT FOR A CREDIT.



Now if you have your

Actual phone bills and come up with an ACTUAL TAX AMOUNT, you cannot

Use line 71 on your tax return. You have to complete a special form

Number 8913 and attach it to your tax return.

Individuals using the

Special from 1040EZ-T will have to attach this form 8913 also.



One final point - this

Credit is a refundable credit. That means you get this money, no

Matter how your tax return works out. If you would end up owing the

IRS a balance, the refund will reduce that balance you owe. If you end

Up getting a refund, the credit will be added and you get a bigger

Refund by that $30 to $60, depending on how many dependents are on

Your return.
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