Telephone Tax Credit

[Bird Legs]

What is the latest on the business telephone tax credit? You'all will please excuse my
ignorance on this subject. Can you take both the business phone credit and personal?
Using the $40. $60. credit? Where do you report the business credit: Sole Proprietor,
C Corp., S Corp?
Would the business have to pick this credit up as income?
Your enlightened thoughts on this will help me trremendously. My flesh is willing but
my brain is asleep.
Thanks to all of you.

[Gretel]

Wake up. Wake up.

A 1040 filer can either take the standard amount or the actual expenses and for his business maybe the simplefied calculations. Never standard combined with anything else.

A corporation is a seperate entity.

[ChEAr$]

credit where credits are due

What is the latest on the business telephone tax credit? You'all will please excuse my
ignorance on this subject. Can you take both the business phone credit and personal?
Using the $40. $60. credit? Where do you report the business credit: Sole Proprietor,
C Corp., S Corp?
Would the business have to pick this credit up as income?
Your enlightened thoughts on this will help me trremendously. My flesh is willing but
my brain is asleep.
Thanks to all of you.

a schedule c filer in order to take both business and personal credits can't use the
safe harbour of 30/40$ etc; must use the form to figure all credits.

Corporations however, both C and S, take the credit on either the 1120 or 1120S.
And all business filers, even the c filer includes rebate as income following year.

[S T]

Telephone Credit

It is giving me a headache!!

So mostly for individuals, check the box and take standard, for the most part so far not even giving the option to the client.

But I am like Bird, trying to decipher what to do for an individual with a Schedule C business?

I haven't even gotten to the point of the 1065 forms or the 1120/1120S forms. Seems like a headache.

Any simple solution that someone could offer would be really, really appreciated.

Sandy

[Black Bart]

Simplify; simplify

Give them the option of taking the standard deduction or -- say you will extend, do it after April 15th, and they can add it up themselves, or you will dig through all that garbage yourself, but you'll have to charge them an arm and a leg to do it and it will probably be very much in excess of any possible credit.

Most people won't want to do it themselves or pay you for your time and will go with the standard.

[JG EA]

Isn't it true

That unless we're talking about a big business with a lot of LD calls that it'll just be pennies x 41 months? This is my impression based on a couple of my not big business phone bills.

[JON]

Cell phones

and other bundled services operations give you the best chance to a larger refund. With Cells when doing the April/September thing-Federal Excise tax usually is 0 in september so you get a little help.

Unless individuals provide a 8913 made out correctly I will not use anything, but the standard.

[ChEAr$]

simple solution

It is giving me a headache!!

So mostly for individuals, check the box and take standard, for the most part so far not even giving the option to the client.

But I am like Bird, trying to decipher what to do for an individual with a Schedule C business?

I haven't even gotten to the point of the 1065 forms or the 1120/1120S forms. Seems like a headache.

Any simple solution that someone could offer would be really, really appreciated.

Sandy

You take the standard credit on the 1040, and also ask the schedule c filer:

"You don't make many long distance calls in your business, do you?" and all the
time shaking your head "no." he'll agree with you. case closed.

[Gretel]

Well, I give my business clients the choice of either doing the digging themselves or go with standard. On a Corp., if I have the books for all years concerned, I will also do the simplified method for them. End of story.

[fliszt]

This isn't the right way

to do the phone tax credit, but I did talk to a CPA that does the return for a joint client, and he said he's not going to try to look up every monthly phone bill for the long done past for a C corp. Since phone bills have been approximately the same, month to month year after year, he is going to take the last 12 and then use an average. As I said, it's not the right way, but that's what was done.

[Brad Imsdahl]

Since phone bills have been approximately the same, month to month year after year, he is going to take the last 12 and then use an average.

For what purpose? Why not use the alternative method? (TTB, page 3-10) Much faster and simpler, and would probably produce the same result.

[fliszt]

Thanks

Brad for the info. My collegue doesn't have The Tax Book, but I will certainly call him and give him the information to order one. Sorry that I didn't even think of that when he called me to help him figure out the phone bills. Sometimes like Birdlegs, my brain is oatmeal.

[Joe Btfsplk]

Telephone Tax and Sch C

If there is a separate business telephone for the Schedule C business, you can use the method described by the IRS instructions: Calculate the percent of the phone bill represented by the tax in April and September 2006, and subtract the Sept percent from the April percent. The excess percent can be multiplied by the annual telephone bills for the 41 month period (adjusting for the fractional years in the 41-month period).

The total deduction would be the $ 30-$60 for the personal phone plus the calculated amount for the Sch C.

Someone said the ATX program handled it properly, using the information from the input screens for Form 8913. It added the business refund to the personal refund.

[Larmil]

Sorry, not correct

If there is a separate business telephone for the Schedule C business, you can use the method described by the IRS instructions: Calculate the percent of the phone bill represented by the tax in April and September 2006, and subtract the Sept percent from the April percent. The excess percent can be multiplied by the annual telephone bills for the 41 month period (adjusting for the fractional years in the 41-month period).

The total deduction would be the $ 30-$60 for the personal phone plus the calculated amount for the Sch C.

Someone said the ATX program handled it properly, using the information from the input screens for Form 8913. It added the business refund to the personal refund.

According to the instructions you cannot take the standard for the personal and actual for the Sched C.

[Gene V]

I agree with Larmil.

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.

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