Telephone Tax Refund

Today TaxMama hears from Dianne in the Tax Parlor, who has a long, complicated question about the new Telephone Excise Tax Refund. Her question is probably a lot like yours. So, we’ll summarize it here – and you can read the details in the Tax Parlor, OK? ” Over the years, we a variety of phones that were used for my husband’s job, then his business and mine, and we had personal phones. We had both cell phones and land-lines. How do we differentiate the taxes through the different periods? I see that there is a “simplified” method for calculating this, but does that apply to be used for the entire period in question?”


Hi Dianne,

Stick with the simplified methods. A few people I know went and computed their potential credit by going back to the invoices. It was generally lower than IRS’s standard credits.

You can find the methods for the simple and complex version at IRS’s website:,,id=164032,00.html

Read the FAQs for business taxpayers, here:,,id=164310,00.html

As to your complexity of phones?

Your personal phones are your personal phones. Just because you made a handful of business calls once in a while on those phones doesn’t make them business phones.

Look back at the last two months of your business phone bills. And pull your tax returns for the last 4 years.

Add up the last 3 years worth of telephone deductions on your tax return, plus 5/12th of the deduction for the 4th year. That will give you the 41 months in the formula.

Remember, if you didn’t deduct the phone cost for business, it wasn’t a business phone, right?

And remember, you’ll find answers to lots of questions about tax refunds and other tax information, free. Where? At

(P.S. Yes, I know there will be a lot of questions about this as tax season progresses. For now, know that on your personal return, each exemption will be entitled to a refund – up to $60 for 4 people per tax return. )

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