Use the Federal Telephone Excise Tax Refund to Lower Your Taxes

Your 2006 federal tax refund should be boosted by this year's Telephone Excise Tax Refund (TETR). The IRS states that "this refund will be the most wide-reaching in IRS history - more than 160 million filers may request it," meaning that you are must likely eligible for this refund as well. So, what is the Telephone Excise Tax Refund and how do you make sure that you are getting your proper refund?

A quick background: From February 28, 2003 - August 1, 2006, any long-distance calls that you made were subject to federal taxes. The courts have determined that these taxes were collected improperly - thus, the IRS will be refunding these taxes to you via your 2006 tax return. This refund applies to landline, cellular or Voice over Internet Protocol (VoIP) long distance or bundled (local and long distance combined) services. Separate local calling plans are subject to the federal tax and will not be refunded.

The IRS has made getting the Telephone Excise Tax Refund fairly easy. Instead of going through old phone bills to determine exactly what taxes you paid during this period, you can simply choose a standard amount depending upon the number of exemptions that you claim on your taxes. The standard refund amount ranges from $30-$60, with a single person filing one exemption receiving a $30 refund and a family of four or more receiving a $60 refund. Depending upon your situation, however, you may want to look for those old bills since you may qualify for a much larger refund than that allotted in the standard amount.