Phone Tax Refunds; It's About Time
By: Stan Hindon; Source: AARP Bulletin Date Posted: 2007-01-16 16:10:00-05:00
Your 2006 federal income tax return contains a pleasant surprise—the refund of a long-distance telephone tax created to help fund the Spanish-American War.
The tax was adopted as a "luxury" tax in 1898 in the days of Teddy Roosevelt, when only wealthy people had telephone service. Federal courts have ruled that the 3 percent tax does not apply to long-distance service as it is billed today. However, telephone users will continue to pay federal taxes on local service.
Refund amounts vary with the number of a customer's income tax exemptions. For one exemption, the standard refund will be $30; two exemptions, $40; three, $50; four or more, $60.
The 2006 telephone tax refunds are expected to total $10 billion, and they cover long-distance telephone expenses incurred between Feb. 28, 2003, and Aug. 1, 2006. They're available to anyone who paid federal long-distance taxes on landline, cell phone or voice over Internet protocol (VoIP) service.
Think the standard refund isn't enough? There's another option: You could dig through 41 months of old bills to claim the actual long-distance taxes you paid. For more information, go to www.irs.gov.
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