Discussion:Tel excise tax refund

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Discussion Forum Index --> Tax Questions --> Tel excise tax refund


Bruschi (talk|edits) said:

19 January 2007
If you have an individual who has a schedule C business, can they take the standard refund on the personal return as well as the actual 8913 on the schedule C excise tax paid?

Deback (talk|edits) said:

January 19, 2007
No, add the two together (actual amounts paid) on Form 8913.

Waynecpa (talk|edits) said:

19 January 2007
This is one place I think the IRS missed - if you have a corporation or partnership you would be able to calculate actual excise tax paid (and to be refunded) and the shareholders or partners could also get the standard refund on their personal returns. If you have a schedule C, you can't calculate the actual for the business line and take the standard refund on the personal lines.

Not fair!

Death&Taxes (talk|edits) said:

19 January 2007
"Life isn't fair." Do remember that these refunds followed many suits in various circuits against this tax. I see no reason the procedures drawn up by IRS to award refunds could not be expanded with additional actions in court. The plaintiff would not be challenging law, but a procedure to refund an erroneous tax collected. The cost might be prohibitive, but the chance might be there.

Waynecpa (talk|edits) said:

19 January 2007
Probably would take a fairly large Schedule C business with lots of long distance to challenge. I can only think of a couple of my clients that would benefit and as you say, the costs would most likely be prohibitive. Oh, well.

Taxea (talk|edits) said:

21 January 2007
I haven't read the law in detail yet but it seems to me if the Sch C has a totally separate business line they should be able to take both business and personal credits. Guess I will be reading it very soon. taxea

Kevinh5 (talk|edits) said:

21 January 2007
No, TaxEA, it is clear that if a Sch C person wants more than the standard amount on his 1040, he must use 8913 and actual expenses for both his home and his business phone bills. The only businesses that get it separate are those that file 1120, 1120-S, or 1065, all of which MUST use the 8913 and actual expenses.

Deback (talk|edits) said:

January 21, 2007
Kevin is correct, Taxea. For both personal and business lines, Form 8913 must be completed, and the total actual tax paid for both bills is entered on each of the lines. And using the April/September method is worthless because of the 2% limit.

Taxea (talk|edits) said:

21 January 2007
Mahalo Deback and Kevin 5 just wanted to be sure the SCH C client could take both taxea

Estock (talk|edits) said:

21 January 2007
Curious - how much more substantial have these refunds been when using actual? I have started a handful of returns for 2006 and need to dive in with this tele tax refund. But just thought I'd ask - is it going to be worth it for my clients to gather this information?

Kevinh5 (talk|edits) said:

21 January 2007
Mahalo, Taxea. Did you come to the NATP Tax Symposium days I taught on Waikiki last Fall?

Deback (talk|edits) said:

January 21, 2007
Elizabeth - For my business clients so far, it is substantial enough to use the actual method on Form 8913. If they paid an average of $3 per month for the Federal tax x 41 months, that would be a refund of $123. $4 per month would be $164.

Estock (talk|edits) said:

21 January 2007
Thanks - I figured my business clients would benefit, but it may not be worth it for individuals - I will just see what happens with some of my early bird individuals.

I was just catching up on my Kiplinger's Tax Letters for the last two weeks and the one dated 1/12/07 has a blurb:

"IRS won't require phone companies to supply free copies of bills that filers need to compute the actual amount of phone taxes paid. Thus, companies can charge customers who need prior bills. So most people will claim the standard credit..."and so on.


I see this as a deterrent for most of my individual filing clients - heck, I myself haven't kept a personal phone bill since I pay them online now - a couple of years at least!

Deback (talk|edits) said:

January 21, 2007
I've had 17 individual tax returns so far and haven't asked any of them what they paid for federal tax for those 41 months. I'm only asking, in some cases, if they paid for phone bills during that period (like the 20-year old who still lives at home...he has no cell phone, so he got no credit). There isn't enough time to have all of my individuals add up their phone bills. I listed it (and the dates) in my December letter, so if they read my letter and bring me the total tax paid, I'll use it. Otherwise, they all get the standard credit.

I haven't added up mine yet, but I may look at the Jan to Apr bills for those years to see if I paid more than $30, which I might have. The rest of the year, I have very few long-distance calls. I've paid my phone and utility bills online since about 2001, and each month, I'll go to their sites and print out my bills. Why I do that, I don't know.

Blrgcpa (talk|edits) said:

21 January 2007
You are doing your clients a disservice by not giving them the option of actual deductions or standard amount. There are people that have more than 1 home telephone.

You should also give them the option of the Apr/Sept computaion.

Deback (talk|edits) said:

January 21, 2007
I understand, Blrg, and I have advised each of them that I need to know what they paid for Federal tax during those 41 months (as I stated above). If they choose not to add up their phone bills and provide me with the amounts....


Also, as I've stated in another thread concerning the Apr/Sept computation, it is worthless, even when I entered in $20,000 for the total bill and $500 for the Federal tax for each of April and September. 2% of $500 is less than the standard credit. I don't have any clients who pay that much for Federal tax. Have you tried the Apr/Sept computation yet?

Sw (talk|edits) said:

January 22, 2007
Our local news is advising that AT&T, Quest,Vonage and maybe others will give you free copies of your bills. At&t has a toll free number and the others I think are online.

Bottom Line (talk|edits) said:

22 January 2007
Don't expect this to last long. IRS isn't requiring free copies and once they figure out what the cost is, I'd expect them to quit.

GPV (talk|edits) said:

28 January 2007
For an individual who files a Sch C there are only 3 options:

1 - Take standard on 1040 for personal use and nothing for Sch C 2 - Use Estimation Method for Sch C and Actual for individual 3 - Use actual for both

Joevinful (talk|edits) said:

31 December 2009
Are refunds of the federal telephone excise tax that are included on Schedule C also subject to income tax in the State of New Jersey ?

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