Federal judges ruled illegal the 3 percent federal excise tax on long-distance phone service. Service providers were ordered to stop charging the tax by August 1, although federal excise tax on local phone service still applies.
You may qualify for at least $30 from the government as your share of the $15 billion dollar telephone tax refund. Businesses and heavy cell phone users may qualify for a good bit more. Approximately 146 million individuals and 14 million businesses are expected to be issued a refund.
For individuals, the IRS will give you a flat amount ranging from $30 to $60, depending on the number of exemptions on your return. You write the amount on a line on your tax return and that’s it. A more complicated, but possibly more rewarding way, to get your break is to add up your taxes on 41 months of phone bills (billed between March 1, 2003, and July 31, 2006) and file a separate form (Form 8913). If you are a heavy phone user who keeps good records your refund could be sizable. If you have not saved your records, it may prove worthwhile to contact your service provider and ask the charge for copies of past bills. If you are not required to file a return, you may also claim the refund by filing Form 1040EZ-T.
Businesses do not have the flat refund option. Instead businesses have a choice to file for actual taxes paid over the 41 months or to submit two monthly phone bills (April 2006 and September 2006) to estimate taxes paid for the entire period. State and local telephone taxes are not part of the refund program.
