12/6/2006 – Editorials

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 we file our 2006 tax return. This credit will be applied against taxes owed. 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 form 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 the 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.

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The US Postal Service expects to deliver 20 billion (that’s right,

billion) letters, packages and cards between Thanksgiving and Christmas. The busiest mailing day is expected to be Monday, Dec. 18 when more than 280 million cards and letters will be processed — more than twice the average processed on any given day.

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Here are a couple items from this column 20 years ago:

Two racehorses were standing in the stables visiting. One said, "You know sometimes when I’m in a close race a kind of electric shock hits me in the breast and it gives a surge of energy which often will help win the race."

The other racehorse said, "Now that’s a coincidence. The same thing sometimes happens to me."

A Greyhound dog got up from where he was lying and walked over to the horses saying, "I’m sorry to intrude on your conversation, but I couldn’t help overhearing what you said. You know I’m something of a racing expert myself and I’ve had exactly the same experience."

One horse turned to the other and exclaimed, "Holy doodle! A talking dog!"

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I picked this up from the Napoleon Homestead at Napoleon:

The Rev. Al Bitz of St. Mary’s Cathedral in Fargo was inadvertently late for a wedding. He was to officiate at an ecumencial ceremony with a Lutheran pastor, but nobody had told him the service had been moved up half an hour. When he got to the church, the ceremony had already begun.

"I waited until the minister was done with the gospel reading and preaching, then I walked up front and we continued with the ceremony," he said. "I felt terrible. I apologized to the parents, but they didn’t realize anything was wrong. They thought that was the way Catholics did it."