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December 15, 2006
MORE FREE CASH FOR SENIORS
Free cash is available to anyone who has a telephone, or cell phone, and made any long distance calls during the period from February 28, 2003 and August 1, 2006. This means that virtually everyone who had a telephone during that time period is eligible.
The refunds range from $30 to $60. You must file a 2006 income tax return to claim this refund. The amount of money you will receive varies depending upon your family size. The IRS uses the concept of exemptions to determine the refund amount. You get one exemption for yourself, if you file jointly you that would be two exemptions, plus you get an exemption for each dependent child, up to a maximum of 4 exemptions for the maximum refund amount. Here is a chart:
• one
exemption, the standard refund amount is: $30
• two exemptions, the standard refund amount is:
$40
• three exemptions, the standard refund amount is:
$50
• four exemptions or more, the standard refund amount is:
$60
You might be able to get a larger refund if you are a good record keeper. If you have saved all of your telephone and cell phone bills since February 28, 2003 to August 1, 2006, add up the excise tax from each bill and you will be able to claim that amount, instead of the standard amounts from the table above.
If you are not filing income taxes because someone told you that you don’t make enough money to file, the rules have changed. In order to get this refund you must file a tax return! You will get the refund even if you did not have any tax withheld and were not otherwise required to file an income tax return.
Free assistance is available. Most senior centers offer free income tax preparation and we, at the Elder Law Center, offer free income tax preparation if the only reason you are filing is to claim this telephone tax refund or the other Free Cash For Seniors program based upon the Senior Circuit Breaker.
In order to claim the telephone tax credit you must file a federal income tax return, and to claim the Senior Circuit Breaker Credit, you must file a Massachusetts income tax return. In 2005 we got seniors over $55,000 in Free Cash!
You’re probably wondering how having a telephone can get you a tax refund. Here’s the short story; For many years the federal government has been charging a tax, called an excise, on your long distance calls. The tax was based upon the distance of the call and the duration of the call. When phone companies starting charging a flat fee that included local and long distance calls, several people took the IRS to court saying that IRS could no longer tax long distance phone calls because the calls are no longer separately billed. The taxpayers won.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org