Get your Excise Tax Refund

When filing your 2006 taxes, don't forget to claim your one-time refund for federal excise taxes paid on your telephone bills, available to anyone who has paid for long distance or bundled service since February 28, 2003. Rather than requiring people to dig up old phone bills, the IRS has set fixed amounts for the credit. For individuals, the rebate is $30 if you claim one exemption, $40 for two, $50 for three and $60 for four or more. Businesses can figure out their actual taxes paid, or use a much simpler formula that the IRS has created.

Las spring, after losing a number of court cases, the IRS decided to stop collecting the 3% federal excise tax on telecom (except local service), an assessment that has been around in one form or another since the turn of the 20th century. In addition, the agency decided to refund excise taxes paid from February, 2003 to August, 2006. The above estimates ($30 to $60) were created to avoid having consumers having to locate and dig through 3+ years of phone bills (although you can file for a different credit if you go back and figure out your actual tax paid).

According to the Treasury Department, about $10 billion will be refunded back to individuals as a result of this credit.