claim your tax freebie this year

Technology killed a 109 year old tax this year and the resulting fallout is a $13 billion refund for us taxpayers.

It's true. You can get an extra $30 to $60 in your pocket this tax season. All you have to do is claim it.

In 1898 the US Government levied a 1% luxury tax on long distance telephone calls. The taxes collected were needed to help finance the Spanish-American War. When the war ended the government decided the tax was better left in place. They must have been in a mood to pick fights.

This little excise tax helped pay for all the fights we've picked for over a century. The tax swelled to 25% during World War II. It was 10% during the Vietnam War. Lately it's been holding steady in the 3% range.

Now to be fair there were attempts to repeal the tax over the years. But as you know, taxes are like crack to politicians. Once enacted they're hooked and they will always find the ways and means to keep the dollars rolling in.

Not this time though, technology saved the day, and it will mean $30 to $60 in your pocket this tax season. Are you old enough to remember when telephone calls were priced individually according to duration and distance? Calls to more distant locations lasting longer cost more and incurred more tax. Even after long distance became a bundled option in phone plans the government kept collecting the tax. This went on until a group of heavyweight phone users and their lawyers got together and challenged the tax in court.

The result was a repealing of the tax effective 1-August-2006. Not only that but the government has to refund taxes erroneously collected since 1-March-2003. That's about $13 billion coming back into our pockets.

Who gets what **

  • $30 goes to single taxpayers with no exemptions
  • $40 will be refunded to those claiming 2 exemptions, such as married couples with no children
  • $50 for filers claiming 3 exmptions, such as a married couple with 1 child or a single parent with two children
  • $60 to filers with 4 or more exemptions

So how do you claim your windfall? Easy. it's a no questions asked kind of thing. Just look for

  • line 71 on your Form 1040
  • line 42 of the Form 1040A
  • or line 9 on Form 1040EZ

** If you prefer, you can go the extra mile and apply for the actual amount you paid. If you spent more than about $25 on average during the period from 1-March-2003 to 1-August-2006 then you probably deserve more than the standard deduction. The IRS has created a form (Form 8913) especially for you. They only estimate it will take you an average of 13 hours and 37 minutes to fill it out:

The time needed to complete and file Form 8913 will vary depending on individual circumstances. The estimated burden for individual taxpayers filing Form 8913 is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file Form 8913 is shown below.

Recordkeeping            13 hr., 37 min.
Preparing and sending
the form to the IRS      13 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

Knock yourself out.

Telephone Tax Refund Questions and Answers