Fru-Gal Friends

Subject: Some good tax news Tue 05 Dec 2006, 12:06 pm

SPECIAL ONE TIME TAX CREDIT ON YOUR 2006 TAX RETURN
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 charged 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 country. 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 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.
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.

Subject: Re: Some good tax news Tue 05 Dec 2006, 12:26 pm

thank escarcha this is really good information

Thank so much
_________________
Gayla

"They take great pride in making their dinner cost much; I take my pride in making my dinner cost so little."

---Henry David Thoreau (1817-1862)

Subject: Re: Some good tax news Wed 06 Dec 2006, 7:00 am

Wow, thank you.
I will try to remember when I get my forms! :-)

~M
_________________
"It is not how much money you make - it is how you spend it."

Subject: Re: Some good tax news Mon 25 Dec 2006, 11:46 am

Eschara,,,do you know of any help on taxes when you are a Power of Attorney for a parent,,,,mom lived with us a few months,,then went into a nursing home before she died..Should I do anything different on taxes,,such as claim her ,,even though she was in the nursing home?

Moderator Age : 27 Joined : 12 Oct 2006 Posts : 1827

Thanks!

kim

Subject: Re: Some good tax news Tue 26 Dec 2006, 7:47 am

Donna,

A few years ago, I worked for H&R Block.
If the parent was in your home, and went to a nursing home where you foot the bill (or provided support for more than half of his/her expenses) - I think it is for more than 6 months, then you can claim her on your taxes

http://www.ftb.ca.gov/individuals/hoh/Index.html

Try this website, to see if you feel you could claim your parent.

~M
_________________
"It is not how much money you make - it is how you spend it."

Subject: Re: Some good tax news Tue 26 Dec 2006, 5:29 pm

Thanks so much M...I appreciate your help! Smile

Subject: Re: Some good tax news Tue 26 Dec 2006, 6:16 pm

I think I am ready for Tax season... hopefully ...
_________________
Gayla

"They take great pride in making their dinner cost much; I take my pride in making my dinner cost so little."

---Henry David Thoreau (1817-1862)

Subject: Re: Some good tax news Wed 27 Dec 2006, 5:20 am

When does your tax year end?
In Aus it's end of June.
_________________
~ By sowing frugality we reap liberty, a golden harvest. --Agesilaus ~

Subject: Re: Some good tax news Wed 27 Dec 2006, 6:38 am

Ours is April 15th - taxes have to be filed.
Or...you can file for an extension.

~M
_________________
"It is not how much money you make - it is how you spend it."