Phone companies have been given notice to stop assessing the federal excise tax as of August 30, 2006 on toll calls. This change in telephone billing statements demands restitution. Thus, the IRS has announced that a one time credit will be available when filing your 2006 tax return of which will be limited. For instance if you are a single person without any dependents, you can claim a $30 credit on line 71 on your 1040. If you are single and have a dependent(s), you can claim a $40 credit. If you are a married couple and file jointly, you can also claim a $40 credit. Finally, if you are married, file jointly, and have dependents you can claim $50 for one child and $60 for two children.
The maximum credit you can claim is $60. The only exception is if you have all your phone bills starting AFTER February 28, 2003 through July31, 2006. In this case you can add up the ACTUAL TAX AS IT APPEARS ON YOUR BILLS AND CLAIM THAT FOR A CREDIT. If you have your actual phone bills and come up with the ACTUAL TAX AMOUNT, you cannot use line 71 on your tax return. Rather you must complete Form 8913 and attach it to your tax return. This tax credit is a refundable credit and you will receive this amount regardless of how your tax return works out.
If you file a business return please contact Sylvia at Bell & Company 501.753.9700.
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