Telephone Tax Refund Question

  • Thread starter William Brenner
  • Start date

W

William Brenner

I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?

The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".

Thank you for your help in making this momentous decision.

Bill
 
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Paul Thomas, CPA

William Brenner said:
I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?

The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".

Thank you for your help in making this momentous decision.
He can't file a 1040-T if he's your dependent. The tax loss
to you not claiming him is greater than the refund if he
were to file separately for the refund.
 
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H

Herb Smith

William said:
I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?
I believe there is a basic misunderstanding here - what is
an "exemption"? According to the instructions for form
1040EZ-T, it is the same number you would use if you had to
file a regular 1040 form. Thus, if you file as usual
(claiming him as your dependent) you have a total of 3
exemptions and would claim the $50 refund on line 71 of your
1040. If he qualifies to be your dependent but you elect NOT
to claim him, he CANNOT claim his own exemption per basic
tax law. In this latter case, your refund would be reduced
to $40 and his would still be $0.

If your dependent son were to file a tax return - because of
taxable income, for example - he would not be allowed to
claim ANY exemption. Therefore, if he files form 1040EZ-T
instead, his claim for refund is $0 (not the $30 you
assumed).

IOW, giving up an exemption not only costs you the $3,300
exemption deduction, but reduces your telephone tax refund
by $10.

BTW, your statement above seems to imply that you need to
file a separate form to claim the refund. Not true, it is
claimed on your regular form 1040 form, line 71.
The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".
It would be wrong, procedurally not morally :)
I thought the more famous words were "I am not a crook"
Thank you for your help in making this momentous decision.
You are welcome!
 
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A

A.G. Kalman

William said:
I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?

The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".
The standard amounts are based on the number of exemptions
claimed. As he is your dependent, he would not be entitled
to any exemption on his own tax return and therefore he
would not be entitled to the $30 rebate. Therefore, you get
to file for $50 based on three exemptions.
 
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H

Harlan Lunsford

William said:
I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?

The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".

Thank you for your help in making this momentous decision.
I thought surely this was answered somewhere above.

anyway, yes, it's based on # of exemptions, so 50$ will be
correct. If he's your exemption then he can't file that ...
T EZ form, whatever it's called.

Hmm, let's see now. That's be... 25$, please! (grin

ChEAr$,
Harlan Lunsford, EA n LA
 
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A

Arthur Kamlet

William Brenner said:
I posted this query in an earlier thread, but received zero
responses. Here it is again:

My wife and I have a zero income adult dependent son who
does not live with us. We provide all of his funding while
he is writing the next "Great American Novel". He has had a
telephone for the designated time period and has paid the
phone bills from the funds given him.

In applying for the refund, should we include him as an
exemption -- as we do on our tax return -- and claim $50 (3
exemptions) or file for $40 for the two of us and have him
file separately for $30, the one exemption amount?

The $20 difference is of no great importance. I just want to
do it correctly. Or would either way be correct? =93Double
dipping=94 is not an option that I would consider. In the
famous words of a former (resigned) U.S. President: "That
would be wrong".

Thank you for your help in making this momentous decision.
You told us he is your dependent, so he cannot claim himself
and you might as well claim him. Telephone tax refund is
$50.

Meanwhile if he has his telephone bills and adds up what he
paid in the allowed period, he can deduct those amounts on
his own tax return even if he claims 0 dependents and even
if he otherwise would not have to file a return.

If he has no phone bills, he does not claim a telephone tax
refund.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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Bill

(e-mail address removed) (Herb=A0Smith) posted:
William Brenner wrote:
It would be wrong, procedurally not morally :)
I thought the more famous words were "I am
not a crook"
"I am not a crook" may be the more famous words, but during
the infamous oval office tapes, the same Dick told John Dean
that while raising a million dollars for bribes would be
easy, "that would be wrong."

In the heady days of impeachment hearings and the Supremes'
decision that the tapes must be released (including the
memorable picture of that "other Dick's" Rosemary
demonstrating how she might have contorted herself to
accidentally erase that notable 17-minute gap on a
particularly sensational tape), _all_ of those things were
fleetingly _famous_.

[I know this strays OT, but other history-minded folks might
be interested in a reminder. With apologies to the
"currently-famous" Dick Adams.]

Bill
 
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A

Arthur Kamlet

He can't file a 1040-T if he's your dependent.
If he paid the telephone tax after February 28, 2003 he can
file the 1040-EZ-T claiming refund of actual taxes paid.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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A

A.G. Kalman

You told us he is your dependent, so he cannot claim himself
and you might as well claim him. Telephone tax refund is
$50.

Meanwhile if he has his telephone bills and adds up what he
paid in the allowed period, he can deduct those amounts on
his own tax return even if he claims 0 dependents and even
if he otherwise would not have to file a return.

If he has no phone bills, he does not claim a telephone tax
refund.
This is very interesting. The 1040-EZ-T states that even if
your exemptions are zero (obviously someone else's
dependent) you can still claim the credit if you use the
actual method via Form 8913. IRS Pub 17 on page 248
explicitly states that a dependent can not claim the credit.
Obviously a conflict.

Assuming a dependent had the actuals and filed the
1040-EZ-T, wouldn't the taxpayer who claimed the dependent
also have to use Form 8913 actual method? The 1040 states
that if use the standard method you use the number of
exemptions claimed. What would happen if a taxpayer claiming
three exemptions only used two to compute the credit because
the dependent filed the 1040-EZ-T with the 8913?
 
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A

Arthur Kamlet

I posted this query in an earlier thread, but received zero
This is very interesting. The 1040-EZ-T states that even if
your exemptions are zero (obviously someone else's
dependent) you can still claim the credit if you use the
actual method via Form 8913. IRS Pub 17 on page 248
explicitly states that a dependent can not claim the credit.
Obviously a conflict.

Assuming a dependent had the actuals and filed the
1040-EZ-T, wouldn't the taxpayer who claimed the dependent
also have to use Form 8913 actual method?
I don't think so.

If your dependent parent actually paid her dentist for her
own dental work, you cannot claim those medical expenses
since you did not pay them. Notwithstanding the fact that
she is your dependent.

If she pays her phone bills, why would you say this affects
in any way how you claim your telephone tax rebate.
` The 1040 states
that if use the standard method you use the number of
exemptions claimed. What would happen if a taxpayer claiming
three exemptions only used two to compute the credit because
the dependent filed the 1040-EZ-T with the 8913?
Why would you think a taxpayer has to use the same method to
claim the telephone tax rebate that the dependent uses?

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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A

A.G. Kalman

I posted this query in an earlier thread, but received zero
I don't think so.

If your dependent parent actually paid her dentist for her
own dental work, you cannot claim those medical expenses
since you did not pay them. Notwithstanding the fact that
she is your dependent.

If she pays her phone bills, why would you say this affects
in any way how you claim your telephone tax rebate.
Why would you think a taxpayer has to use the same method to
claim the telephone tax rebate that the dependent uses?
I agree with you. The IRS Notice states that one must look
to the tax form instructions. The instructions state that
even if you claim zero exemptions you can file for a refund
of actual taxes paid. Therefore, the statement in IRS Pub
17 is wrong or maybe it is right and the instructions
overlooked this. (;-D
 
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A

A.G. Kalman

You told us he is your dependent, so he cannot claim himself
and you might as well claim him. Telephone tax refund is
$50.

Meanwhile if he has his telephone bills and adds up what he
paid in the allowed period, he can deduct those amounts on
his own tax return even if he claims 0 dependents and even
if he otherwise would not have to file a return.

If he has no phone bills, he does not claim a telephone tax
refund.
Hey Arthur... have you seen the latest guidance from the
IRS (Notice 2007-11) that clarifies and amplifies Notice
2006-50?

If a taxpayer's dependent has filed or plans to file a
separate request for credit or refund of the communications
excise tax, the dependent is not included in the taxpayer's
calculation of the number of exemptions for determining that
taxpayer's standard amount.

In other words, you can't use the exemption for a dependent
to compute the standard credit if that dependent is filing
for their own credit or filing for an actual refund.

This guidance is now consistent with the statement in Pub 17.
 
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