Tax Tip: Don’t Forget Your $30+ IRS Telephone Tax Refund

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Since the IRS starts accepting electronic returns this week, let’s start off with the tax tips. First, an easy one: the IRS Telephone Tax Refund.

Summary: Courts decide old phone tax not legit, should be refunded. You and I get money back.

Easy way: Check a box and take the standard amount, which is $30-$60 depending on how many exemptions you claim. Single people with one exemption get $30. No bills, no paperwork.

Hard way: Gather all your old cell phone, landline, and VoIP bills from February 28, 2003 to August 1, 2006 and add up all the excise tax you paid for those 41 months. If it’s more than what you would have gotten with the easy way, fill out Form 8913 and get that amount instead. If you kept your bills, this might be worth the effort.

I’m going to a CPA this year to get my taxes done for the first time ever, I wonder what he’d say if I came in with a huge box of paper and pretended that they were 41 months of phone bills that I wanted him to sift through…

More information from the source: Telephone Tax Refund Q&A page.

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Comments

  1. I would recommend you at least consider doing it the hard way. I “drafted” my taxes last week to get an idea of how things look and I had over a $70 credit. I’m also the kind of guy that keeps scanned copies of all his bills for that past ten years. 😛

  2. The CPA will say that he would love to have one of his minions go thru your old stack of phone bills and he will charge a nice hourly fee for doing so.

  3. Alex - YoungFinances.com says

    He’d probably be happy to charge you $200/hour to sift through your phone bills for you 🙂

  4. Yup, that’s exactly what he said 🙂 Darn, now I have to organize my shoebox…

  5. ARGH, I finally broke down and shredded those old bills last year because I couldn’t really come up with a good reason to keep them!!

  6. I pitched mine, too. In somebody’s blog about a year ago, I read that one way to reduce clutter was to not keep utility bills for more than a year. I have had a land line and cell phone for that entire period, so I may be a little short on the standard deduction – but, I am a little less cluttered!

  7. How does one find a good CPA to do taxes? I was going to do it myself with a tax program but now I’m thinking about paying a pro.

    Nothing too bad, single income household, 2 kids, no state tax, some capital gains and interest, I claim married/8 to “break even” more or less, mostly basic stuff nothing too complicated. I don’t see how a pro will make anything better than I already do but I was going to consider it this year.

  8. Do you think I can file federal taxes for my 2 children to try to get the phone refund? I know you don’t have to file taxes for dependants unless they make over a certain amount, but I also don’t think that you aren’t specifically not allowed to. Just wondering what you think about doing this for an extra $60.

  9. Margaret Talbot says

    My husband and I are retired and under the income level to pay any taxes. Is there any way we can get back this telephone tax.

  10. AT&T has my landline bills since 2003 online so I don’t have to dig up my paper copies. My cell phone company only has a year and a half of bills so I’ll have to look for my older ones. It looks like the average has been around $1.10 / bill, so 2 accounts for 41 months should be about $90. That’s worth it to add up a number from each bill and mail it in.

  11. I just looked at the details. The refund only applies to long distance or bundled long distance/local. Since both of my accounts bill long distance and local separately, I can only get a refund on my long distance taxes and there is no way I’ve broken $30 on that (very little long distance calling). I guess I’ll just take my $30 and be happy with that.

  12. Re: booyah27’s comments

    > Do you think I can file federal taxes for my 2 children to try to get the phone refund?

    Sorry booyah. Since your kids are your dependents they will have zero exemptions on their own tax forms. Zero exemptions means $0 for the phone refund tax unless they can itemize their own phone bills on Form 8913. I guess the IRS already figured out that potential tax dodge.

  13. If you do want to go through the trouble and use AT&T (and was formerly and SBC customer before the AT&T-SBC merger) I just noticed today that they do have a link in the Account Manager where you can download all your old bills and calculate the FET. I’m not sure if this exists if you are an old AT&T customer, but if I do come across it, I’ll post it.

  14. First and foremost, working for a CPA and doing taxes, I am that minion who has to sort through those shoeboxes and put the tax return together for the CPA to review. They don’t mind at all – especially if you get it to us early, then us peons have something to do and we can bill high rates for it.

    Second, for dpxjax, you don’t have to have a “CPA” do your taxes, other people like esquires I believe can also do them for you. You pay for a service, just hope it is a good and reputable one (and don’t go to anyone who says they will take x % of your refund, or will give you X refund for X amount.)

    Last, for booyah, I’m not sure if you mean file two returns for your two children, but in order to take the credit you can’t be a dependent of another. Personally, this is the first year it’s been tax advantagous for me to claim myself, plus I get this $30 credit and I’ve never paid any of the tax. Meanwhile, my parents can (and on my recommendation – and yes I will be helping with their taxes – not the counting of amounts.) will sort through the utility bills to claim the maximum credit they can get. This is a credit, so if you were organized and know where all those bills are, and can save 150 dollars in 30 minutes it’s like paying yourself $300 an hour! If you’re unorganized, you have to think how much you hate Uncle Sam and how much you [under]value your time.

  15. Another IRS page

    “Don’t need to file a return? You can still request the refund. Use the new Form 1040EZ-T, Request for Refund of Federal Telephone Excise Tax, to choose the standard amount. Attach Form 8913 to Form 1040EZ-T if you use the actual amount.”

  16. I have large cell phone expenses (200-250 per month for all of my lines) plus the VoIP line of ~45 per month. Unfortunately I don’t have all of the bills, but I do have all the records of payments in my MS Money file. I plan on filing Form 8913 and if (which hopefully won’t happen) I get audited I can always just request the bills from my cell provider etc. I think a lot of people are in this same boat. Anyone else plan on doing it this way?

  17. He/She would smirk and say, you know that is gonna cost you $250 of my time to find maybe $75….ok will do lol

  18. IRS Announces Standard Amounts for Telephone Tax Refunds

    IR-2006-137, Aug. 31, 2006

    WASHINGTON ? The Internal Revenue Service today announced the standard amounts that most long-distance customers can use to figure their telephone tax refund. These amounts, which range from $30 to $60, will enable millions of individual taxpayers to request the telephone tax refund without having to dig through old phone bills.
    In general, anyone who paid the long-distance telephone tax will get the refund on their 2006 federal income tax return. This includes individuals, businesses and nonprofit organizations. The 2006 return is usually filed during 2007.

    The standard amounts are based on the total number of exemptions claimed on the 2006 federal income tax return. The standard amounts are $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four or more exemptions. For example, a married couple filing a joint return with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60.

    ?The easiest way for eligible taxpayers to get their money back is to use the standard amounts,? said IRS Commissioner Mark W. Everson. ?These amounts save taxpayers from locating 41 months of old phone bills and analyzing these bills to determine the taxes paid. We believe the standard amounts are both reasonable and fair.?

    To get the standard amount, eligible taxpayers only need to fill out one additional line on their regular 2006 return. The IRS is creating a special short form (Form 1040EZ-T) for those who don?t need to file a regular return.

    The standard amounts are based on actual telephone usage data, and the standard amount applicable to a family or other household reflects the long-distance phone tax paid by similarly sized families or households. Those who paid the long-distance tax on service billed after Feb. 28, 2003 and before Aug. 1, 2006 are eligible for a refund.

    Only individuals can use the standard amounts. Alternatively, individual taxpayers can choose to figure their refund using the actual amount of tax paid.

    Details on requesting the telephone tax refund will be included in all 2006 tax return materials and on irs.gov.

    Though businesses and nonprofits must base their telephone tax refund on the actual amount of tax paid, the IRS is looking for ways to make the refund process easier for these taxpayers. The IRS is considering an estimation method businesses and nonprofits may use for figuring the tax paid.

    “Businesses and nonprofits generally have more varied usage patterns than individuals do,” Everson said. “We’ve met with a number of business and nonprofit groups to understand their concerns, and we plan to continue to work with them to come up with a reasonable method for estimating telephone excise tax refund amounts.”

    Almost plain english from the IRS for a change.

  19. Does government fees & taxes include the excise tax ? Could not figure it out from my Cingular bill was was the excise tax portion.

    Any ideas ?

  20. The GST (govt services tax) tax is the excise tax that is being refunded. The tax started during the Spanish-American War, guess they decided it should be omitted!! Not looking at my phone bills but I do recall several years back observing it on Co. phone bills. Cant remember the tax rate % though 😳

  21. I looked through my cell phone bill realized these is a list of 11 items in the “Taxes and Fees” section. I can’t figure out from this list, which exactly is the “Government Services Tax” I should be reclaiming!

    Anyone have any idea? The good folks at TMobile seem to be utterly in the dark about which is the correct excise tax to focus on, unfortunately….

    Taxes, Fees and Surcharges
    Item Amount
    Government Fees and Taxes
    Federal Universal Service Fund 0.63
    State Gross Receipts Tax 0.15
    State Sales Tax 1.75
    State Telecom Excise 1.08
    County Surcharge 0.05
    County Telecom Excise 0.85
    MCTD Surcharge 0.26
    Local Sales Tax 1.88
    State 911 1.20
    County 911 0.30
    Regulatory Programs Fee* 0.86
    Taxes, Fees and Surcharges 9.01

  22. uferblugen says

    I had the same trouble and there isn’t an easy answer anywhere on the web. My T-Mob bill charge a federal excise and a telecom excise. If I can claim both of these numbers, itemization works to my benefit. If the telecom can’t be included, somebody stop me;)

  23. I referenced the IRS Telephone Tax Refund Q&A link from
    ‘My Money Blog’ and found the 12th question down ,
    ‘How do I find the telephone excise tax charges in my old telephone bills?’ It states some of the phrases to look for:
    -Federal
    -Federal Excise 3%
    -Federal Excise @ 3%
    -Federal Excise Tax
    Federal Taz
    -Fed Excise Taz

  24. Sorry, need to correct my previous comment. (I hit the wrong key.)

    Some phrases to look for:
    -Federal
    -Federal Excise 3%
    -Federal Excise @ 3%
    Federal Excise Tax
    -Federal Tax
    -Fed Excise Tax
    -FET

    My long distance carrier is at&t. I had been billed for
    ‘Federal tax’ through May 28, 2006. That tax didn’t show up
    on any future bills. Just stopped. This ‘Federal tax’ is what I will be adding up for my telephone excise tax charges.

    For my Verizon cell phone statements I need to add up the
    ‘Federal Tax’ charge listed separately for each of our three lines per statement and will list these tax charge totals under ‘Bundled service’ on IRS Tax Form 8913. Again, “Federal tax’ charges on my cell phone statements stopped after the May 15, 2006 statement.

    For uferblugen-
    My at&t long distance statements also have Telecomm Excise
    as a tax. I don’t think this is a Federal Excise Tax even though
    the word ‘excise’ is used. If I added my Telecomm Excise charges up it would be a hefty sum. Since Telecomm Excise was not listed as part of the IRS Q&A “How do I find the telelphone excise tax charges on my old telephone bills?”, I won’t be adding in those charges and can’t recommend you do. Also, Federal Tax charges have stopped on my at&t and Verizon statements but Telecomm Excise still shows up as a charge.

    If anyone hears different about ‘Telecomm excise’ let us know.

  25. The telecomm excise charge is state and local related. On my bills, it comes out to 12%. It isn’t the Federal tax available for refund.

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