Taxing Matters: Telephone tax refund
Wednesday, March 07, 2007
By Dave Cohen
There is a one-time only item on 2006 federal tax returns. Anyone who
paid for long distance phone service either bundled (as with many cell
phones) or billed separately, at any time from March 1, 2003 to August
1, 2006 is eligible to receive a refund of federal tax charged. A
simplified refund of from $30 to $60 is available.
It is claimed along with other Federal tax payments like tax withheld
on wages. As usual, many eligible taxpayers are not claiming it (IRS
says almost 1/3 of filers), and others are incorrectly claiming
exorbitant amounts. Persons not required to file a return can apply for
a refund of that tax only on special form 1040EZ-T.
Energy Credits
For 2006 and 2007 a tax credit is available for the purchase of
energy-efficient property and equipment installed for use in one’s main
home located in the U.S.
Eligible items include insulation, energy-efficient doors and windows,
and certain furnaces and hot water heaters. The credit is 10 percent of
cost to a maximum of $500 for both years combined ($200 maximum for
windows and doors).
An “Energy Star” label is a clue to the eligibility of the items.
Larger credits are available for the installation of alternative energy
systems like solar panel and fuel-cell systems. Use in second homes
(e.g. vacation homes) located in the U.S. also applies to these larger
credits.
Since the credit is to end with 2007 tax returns, a contemplated energy
conscious home improvement might be advisable for 2007 instead of a
later year.
Hybrid Vehicles
With the purchase of an energy-efficient automobile with a hybrid
component, there is a credit that may be as high as $3,150. The auto
must be used predominantly in the U.S. and the taxpayer must be the
original user.
The vehicle must be new, of the 2005, 2006 or 2007 model year. When a
particular manufacturer has sold its 60,000th hybrid vehicle, the
credit begins to be phased out for that manufacturer.
Toyota and Lexus reached that threshold in the second quarter of 2006.
For purchases of their hybrids, full credits are available for
purchases made through 9/30/2006. Only 50 percent of the maximum credit
is available for purchases of their vehicles from 10/1/2006 to
04/01/2007.
Purchases after 9/30/2007 do not qualify for the credit for Toyota and
Lexus hybrids. Ford and GM hybrids still qualify for their full
allowable credit.
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