Easy Tax Credit for almost EVERYONE! Thanks Teddy Roosevelt! (But Hurry.)

ITS REAL! - - -  ITS CASH IN YOUR POCKET!  - - - ITS A ONE TIME TAX CREDIT FOR TAX-YEAR 2006 ONLY!  DO IT NOW! (REFUNDABLE TAX CREDIT not DEDUCTION)

When it comes time to prepare and file your 2006 tax return, make sure you don't overlook the "federal excise tax refund credit." Claim the credit on line 71 of 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 been paying a phone bills for years, make sure they know about this form 1040EZ-T.

The Federal Excise Tax, was imposed in 1898 to help fund the Spanish-American War. One of the things it taxed was telephone service.  The war ended and the bills for it were settled up, but the tax stayed in place.  When phone companies began to offer flat fee phone service, challenges to the excise tax ended up in federal courts. 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 conceded this argument and phone companies were 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.

The challengers also demanded restitution. So the IRS announced that a one time credit will be available when you file your 2006 tax return. 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. The most you can 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 (plus statutory interest) FOR A TAX CREDIT. (Don’t forget to check your Cell Phone Bills too!)

Now if you have your phone bills and come up with an ACTUAL TAX AMOUNT, you have to complete IRS form 8913 and attach to your tax return. Individuals using the special from 1040EZ-T must 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, this Tax Credit will reduce that balance you owe. If you end up getting a refund, the credit will be added.

This is a one-time tax credit, so those who fail to file for it on their 2006 returns will likely lose their shot at claiming it.