More on the Phone Excise Tax Refund

A couple of weeks ago, I posted a tax tip on making sure that you get your phone excise tax refund for tax time. Since that time, I have had the opportunity to speak with Dick Hansen of www.refundphonetax.com in more depth about this refund that you can claim on your taxes this year. "What we're finding is that the average individual is looking at between $120 and $150 back," says Hansen. He points out that the standard deduction from the IRS, if you do not want to go through the documentation process, is between $30 and $60. Whether you want to go through the process of rounding up old phone statements and deciphering whether or not you wrongfully paid a phone excise tax is up to you. The IRS estimate that it will take about 13 hours to round up that information. Hansen, however, believes it can be done faster. "If you have good record-keeping," he insists, "you can probably get the information in about six hours." And he reveals that some phone companies are actually making the information available online. Qwest and AT&T are two of the major phone companies that are provding statements for customers going back to March 2003 (the time period covers March 2003 to August 2006). You can call your phone company to determine whether or not you can access the phone excise tax information online. For some people, getting the maximum amount back is a quest, a point of principle and honor. For others, it is simply about cost-efficiency. Hansen suggests that you can maximize the money you get back for the time put in by doing a little advance planning. "Stop and think about who your major phone companies are," he advises. "If you use your cell phone a lot more, it may not be worth it to bother with your landline." This is especially true if you only have a landline for basic service. If you use your cell phone for long distance and most calling, then focusing on phone excise tax refund on your cell phone would be the most cost-efficient. Here's how Hansen breaks it down:

"If you spend $100 a month on your cell phone, as is about average for most individuals, and the charge was a 3% excise tax, then you are looking at $3 per month. If you multiply that over the 41 months, you get $123. And there is an average of 16% interest. This equals a total $143 refund. If you spend more by going over your minutes and with other charges, that number could be even higher."

Even if you decide that the phone excise tax refund isn't worth hours of looking, you should make sure that you stay on the look out for the refund on your tax form. "Regardless," says Hansen, "you should still at least take the standard amount. You don't need documentation for that, and $40 or $50 is still $40 or $50." You can get information from the IRS on phone excise tax refund here. tax refund, personal finance, financial planning, finances, phone excise tax, phone excise tax refund, taxes, IRS