I sow on TV that the phone bill is tax deductible this year is it true?

Answer 1

The bill is not tax deductible. Every person *who pays for long distance* gets at least a $30 tax writeoff from the federal excise tax.

You can find more information at the website below:
http://www.irs.gov

Answer 2

When I helped a friend do taxes she told me there was a place on the 1040EZ form to include FEDERAL EXCISE TAXES from a phone bill, which probably amounts to $50 a year.

Apparently you can deduct this and drop your taxes by another $1 on the average.

You can't however, deduct the entire bill unless it's a dedicated phone used for business. And you must have TWO LINES in a home to be able to deduct ONE of them as business.

Answer 3

Not your phone bill. A telephone excise tax than had been collected on long distance calls, but was found to be illegal and is being refunded as a credit on income tax returns. If you file a return, there's a line in the "payments" section to claim the credit. If you don't file a return but are eligible for the credit, file 1040EZ-T to get it.

The credit ranges from $30 to $60, depending on family size.

Answer 4

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 charge 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 countr y. 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 dep endent , 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.

Feel free to pass this on or make copies for family and friends who don't have computers.



Comments: True. There isn't much to quibble with in this message. As stated above, in May 2006 the U.S. Treasury Department pronounced an end to the antiquated 3% federal excise tax on long-distance telephone service and provided for a one-time tax credit / refund for individuals, businesses, and non-profit organizations who paid the tax between Feb. 28, 2003 and Aug. 1, 2006.

Individuals may either calculate the exact amount due by totalling the federal excise tax charges on their phone bills for that period, or enter a standard amount (from $30 to $60, depending on number of exemptions) on their 2006 tax returns. (Businesses and non-profits cannot use the standard amounts.)

According to the Internal Revenue Service, details on requesting the one-time telephone tax refund will be included in all 2006 tax return materials.

Answer 5

IRS is giving a credit for excise tax they charged on the long distance telphone bill. You can claim $60 credit or actuals if you have old telephone bills.

Answer 6

I write my phone bill off every year and have been for 3 or 4 years now, i think you can only write it off if you use if for bussiness though.