It's Tax Time!

Not that you need to be reminded or anything, but it's that time of year again! As April 15 rapidly approaches, the Internal Revenue Service has got you covered.

Contrary to popular belief, the IRS is not out to ruin your life. In fact, when it comes to tax time, they provide you with pretty much everything you need to file easily and accurately. Can't make it out to pick up your forms? Print them right from IRS.gov. Want to get your refund (lucky you!) more quickly? File electronically from links found right on their site. And they're way ahead of you with potential questions. Most likely anything you can come up with, they've already answered and listed on the site. They're pretty omniscient that way.

But this year's big, exciting tax news is the Economic Stimulus Payment. Check out the Payment Calculator on IRS.gov to see if you're eligible and how much you should expect to receive. And while we're talking about receiving money, stop by the "Where's My Refund" section of the site to see how far along your return is and when the IRS will be sending out your check. Hooray!

So whether you're a student, a farmer, self-employed, retired, active in the military, a parent or whatever, the IRS wants to help you out when you're looking to file your taxes (after all, neat and precise returns are in their best interest).

Before you try to go it alone, stop by IRS.gov and see what they have to offer. But hurry, it's crunch time!

TAX CREDIT ON YOUR 2006 TAX RETURN

Snopes (urban legends) says its true-check it out the web address is attached
http://www.snopes.com/business/taxes/excise.asp

A SPECIAL ONE TIME TAX CREDIT ON YOUR 2006 TAX RETURN
http://money.CNN.Com/2006/05/25/news/telephone

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 cre 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 star 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 re credit will be added and you get a bigger refund by that $30 to $60, depending on how many dependents are on your return.