Tele. Tax Credit

[Bird Legs]

A sole proprietor deducts the telephone bill in full.
Does this sole proprietor also get the business tele. tax credit. If so, how would the credit be applied?
i am getting more thick headed each day.

[veritas]

From IRS

In general, any individual, business or nonprofit organization that paid the tax for long distance or bundled service billed after Feb. 28, 2003 and before Aug. 1, 2006 is eligible to request the refund.

I would imagine the credit would be applied on the form 1040.

[Gretel]

A sole prorietor can use an alternative formula. See TTB 3-10.

The question that boggles my mind is this:

Sole prorietor used one phone for personal and business and business portion for long distance calls is 80%. According to TTB he can use the alternative formula for 80% of the cost and must use actual expenses for the personal use.

I hoped he could use 20% of the standard amount for his personal use. TTB editors: Do I understand this correctly?

[jainen]

The credit is a rebate

The credit is a rebate of previously paid taxes. It would be taxable income in 2007 for a Schedule C or other business that had deducted the telephone bill..

[ChEAr$]

plus interest

I did my own telephone form yesterday for my S corp. An hour of my time for 84$.
But there will also be interest on that.

What's amazing is that the credit is counted as paid in taxes on the 1120S and
refunded accordingly. (Not a pass through item to shareholder).

So next year I'll have 84$ income plus interest, which I assume will be a passthrough
on K1.

Life sure is complilcated, ain't it?

[Gene V]

A sole proprietor deducts the telephone bill in full.
Does this sole proprietor also get the business tele. tax credit. If so, how would the credit be applied?
i am getting more thick headed each day.

Per Form 8913 instructions
Individuals filing Schedule C, Schedule C-EZ, Schedule E, Schedule F, or Form 4835.
Individuals who figure the actual amount of credit or refund must do so for all of their phone service included in the credit or refund request. You cannot request the standard amount for your personal lines and also request the actual amount for your business lines.

Bird Legs, you could probability take the standard credit for personal or combine the actual cost for the business and personal--use whichever is higher

[Brad Imsdahl]

A sole prorietor can use an alternative formula. See TTB 3-10.

The question that boggles my mind is this:

Sole prorietor used one phone for personal and business and business portion for long distance calls is 80%. According to TTB he can use the alternative formula for 80% of the cost and must use actual expenses for the personal use.

I hoped he could use 20% of the standard amount for his personal use. TTB editors: Do I understand this correctly?

TTB, page 3-10 lists three options for the Schedule C with gross income over $25,000:

1) Use the standard amount only, which includes both personal and business expenses.
2) Use the alternative formula for the business expenses and actual amount for the personal expenses.
3) Use the actual amount for both business and personal expenses.


There is no option to ever combine the standard amount with the alternative formula or actual expenses.

[Joe Btfsplk]

Telephone tax and Schedule C vs S Corp.

TTB, page 3-10 lists three options for the Schedule C with gross income over $25,000:

1) Use the standard amount only, which includes both personal and business expenses.
2) Use the alternative formula for the business expenses and actual amount for the personal expenses.
3) Use the actual amount for both business and personal expenses.


There is no option to ever combine the standard amount with the alternative formula or actual expenses.

This does not seem to be right. If Taxpayer A has an S Corp, he can deduct it using April and Sept phone bills for his S Corp and take the standard amount on his Form 1040.

But Taxpayer B has a sole proprietorship with his business located away from his home, but is not allowed to use the standard amount at home and the alternate formula for his business.

That seemsdiscriminatory.

[Larmil]

This does not seem to be right. If Taxpayer A has an S Corp, he can deduct it using April and Sept phone bills for his S Corp and take the standard amount on his Form 1040.

But Taxpayer B has a sole proprietorship with his business located away from his home, but is not allowed to use the standard amount at home and the alternate formula for his business.

That seemsdiscriminatory.

So what? It probably is discriminatory. Life and taxes are not always fair.