Monday, March 12, 2007

Great Tax Advice from Life in the Shadows?

For the first time ever, I will be giving tax advice here on the blog. There's a reason I've never done this before, and it's not because I'm a financial advisor who is worried about a conflict of interest. It's because taxes are boring, I hate doing them, and I try to spend most of my life not thinking about them. However, I found a tax break that I just had to share. If you're already falling asleep, I apologize. There are a couple Youtube videos below that are far more entertaining.

Be sure to take advantage of the Telephone Excise Tax Refund offered this year. I read somewhere that around 90% of the people who have already filed their taxes have not taken advantage of this refund. (remember that 97% of statistics are made up on the spot) If you have no idea what this is, you're not alone. If you can stand reading IRS jargon, you can read about it here.

Basically, you're getting a refund for federal taxes on your long-distance (or bundled) phone service from March 2003, to August 2006. If you have a cell-phone, this probably applies to you! Just check your previous statements (hopefully you have them all online) and look for a section of the bill that says something like "Federal Tax." It will have disappeared from your bill somewhere around August 2006 (mine stopped in June '06).

Now, here's the fun part. The IRS will give you a standard deduction of $30 for one exemption, or $40 for 2, $50 for 3, and $60 for 4. If you've been paying this tax since 2003, I recommend that you actually find your old statements and add them up (instead of taking the standard deduction). If you're extremely lazy, just take the standard deduction. But my wife and I will get an extra $25, just for adding everything up. If you do it that way, you need to use Form 8913.

Whatever you do, please make sure to get your moneys.


mike said...

Great info. My tax prep software specifically asked me about it so I claimed it. Otherwise I never heard anything about it and probably would have failed to claim it.

Jason266 said...

I passed this info on to The Lovely Wife, CPA.