One Time Tax Credit

I just read this...........A SPECIAL ONE TIME TAX CREDIT ON YOUR 2006 TAX RETURN

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. What is this all about? Well the federal excise tax has been charge 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. The IRS has now conceded this is obsolete.. 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 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. 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 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.

Mark is the Chief Sales Officer of SCT Product Sales.
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