IRS and Telephone tax refund

• What is telephone tax refund?

Think the telephone-tax refund as a payment that occurs only once on a person’s previous year’s federal IT return. The refund returns all the federal excise tax collected on long-distance tele-services. Even bundled services come within the jurisdictions of this refund.

• Why is the government refunding these taxes?

The decisions of the federal court can be held responsible for this change; certain revisions made of recent by the federal court excluded this tax from the jurisdictions of long-distance telephone services as well as from the telephone services offering a flat rate or even those that come with Internet and VoIP. However, the local services are not included into the refund plan.

• What is the procedure to get the tele-tax refund?

For filing an amended tele-tax return, a special short form is to be filled first; it’s the Form 1040EZ-T. Any individual in the low-income group as well as senior citizens can opt for this tax return on telephone bills paid till the previous year. The process is as follows:

• File Form 1040X. Requesting for the refund of the federal telephone excise tax, do the following:

 Fill in the top portion of the form through line B,
 Write the amount to be requested on Line 15 and add “FTET” to the dotted line below,
 In Part II, the Explanation of Changes, write “Federal Telephone Excise Tax”,
 Add your signature and send it to the IRS Processing Center of your State. You can find the address on the Form’s Instruction page itself.

One point to be noted is that if you are requesting for a refund of the paid telephone excise taxes than that of the standard amount, you also need to fill Form 8913, Credit for Federal Telephone Excise Tax Paid. Multiple changes to 2006-tax return are to be followed by filling the form according to the Instructions listed.

The request for standard amount is optional and the easiest way for requesting a refund. A family of four including two dependant children can be eligible for a maximum refund of $60. If you do not want to use the standard amount, then you must figure the refund with the original amount of tax that you’ve paid. Sometimes it results to a much bigger refund. Fill up the Form 8913 and attach the amended returns, if you are looking for this option. It is not necessary to show all the bills for the entire 41-month period, i.e. from March 2003 to July 2006, but you must have sufficient records to back up the refund amount that you are requesting.

Since the business units and non-profit organizations cannot avail the standard amount, they must fill out Form 8913 and request their refund basing on their actual tax paid. This form needs to be attached with Form 1120, 1065, 11205 or 1041 for business organizations. Non Profit Organizations should attach this same form with Form 990-T.


• Who is eligible for telephone tax refund?

Generally, any person or a business unit or a non-profit organization that had paid the tax for long distance calls billed in between 28th February, 2003 to 1st August, 2006 are eligible to request for the refund. It is open to everyone who cleared taxes for landline, VOIP (Voice Over Internet Protocol), or wireless services. But then again, to hear it from the horse’s mouth, no place can be better than Respond; find the right people here who can guide you throughout the process to earn you back the lost dollars, just like the other three million did.

Advantages of outsourcing Accounting services

Ask any firm providing accounting services or tax preparation and they shall tell you about the benefits of outsourcing the jobs. The prime reasons behind bookkeeping firms preferring it this way are:

• Reduced labor costs

Since outsourcing involves the third world countries (chiefly, India and China where every dollar is multiplied several times in their currency), the amount to be paid to a couple of accountants in the first world country can remunerate a large team. These people are also very much proficient in their own fields; hence, it’s less for more.

• Payroll

Since the work is outsourced, the people doing them doesn’t require being on the payroll of the company that is outsourcing. This takes away the burden of granting employee benefits and the related legal responsibilities to the company.

• Lower fixed costs

A bigger benefit for the outsourcing bookkeeping firms comes in the form of cost advantages; it saves big time on the costs that would have been spent otherwise on the operations and the overheads. Investment on an infrastructure can thus be ruled out including buying the expensive software and the respective licenses, employee training and support; all these add up to big time financial benefits for the outsourcing accounting firms.


With all that understood, firms into accountancy need to find a service provider who is reliable and costs less. That way, Respond can help; with a roster that’s virtually endless and a customer base exceeding the three million mark, there is a service provider awaiting every accountancy firm of every budget and every type of accountancy related job; all that is required now are just a few clicks of the mouse.

Receive your refund faster with direct deposit

Desperately need your refund?
Get your refund deposited directly into your account. It has become a normal trend for tax payers to receive their federal tax refunds directly deposited into their bank account.

In the year 2005 more than 50 million people got their federal tax refunds deposited directly into their account.
It is a very fast secure and easy process. It is very much beneficial to the senior citizens and physically handicapped persons.
• Secured mode of payment - As there is no chance of the check getting lost in the middle and also the chance of undelivered mails are eliminated, the direct deposit of the federal tax refund into the bank account is the most secured way of payment. It is the best guard against stolen tax refund.
• Convenience - There is no hassle of going to the bank and depositing a tax refund check.
No need to stand in queue. Easy for the Senior citizens and physically handicapped tax payers.

To get more information you can login in to the IRS website for online resources.

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How to select an Accountant

Selecting the right accountant is of great importance to any small business. That is because, the accountant can double up as a financial consultant too, and this is valuable resource for the small business. But the sad part is most business owners never thoroughly consider all the factors that need to be, while they are making a selection. This is perhaps because of the fact that most people do not have an accounting background and lack a working understanding of the subject.

Changing an accountant is not an easy job too. And so, it is essential that as the small business owner, you should be making the right decision, the first time.

The best way to start finding an accountant is by asking yourself… “What Bookkeeping Services do I need?”

Why the small business needs an accountant?

Most people need an account just to record the financial transactions of the year and generate the various reports from that such as “Profit and Loss Statement” and the “Final Accounts”. The person also helps the small business in finding out the amount due as tax and filing that tax too.

But the accountant can do much more than that!

A good accountant should be able to help the small business analyze and interpret the financial data and then be able to transform that data into profitable business process. So look out for an accountant who can do this and has the necessary experience in this as well.

Here are certain areas where your accountant should be able to help your small business

Planning your Tax: The accountant’s role should not be limited to just preparing tax forms and filing your tax. He must be able to help you in business planning throughout the year and should regularly advise you on this.

Business Consulting: Can the accountant help the small business grow? Every business has a problem and this is true with the small business too. So a really efficient accountant should be able to work much like a general business consultant and offer specific solutions. The areas of operation can be inventory strategy, pricing, risk management, decisions as to lease or buy, and the person may even help the small business owner on strategic marketing decisions.

Personal Finance Advice: The performance of a small business depends to a great extent on the personal financial position of the owner. And so the accountant should offer personal financial advice because this has an obvious impact on the business too. Long term investment advice such as in retirement planning and investment opportunities always helps the small business owner.

Technology Know-How: The Internet and the availability of software applications and tools offer a great opportunity for small business to benefit from technology. The accountant should be able to use the available technology to provide information and strategic intelligence to the small business owner.

Networking: Can your accountant refer you to others when you need specific help? A person who has strong networking skills knows many people and every small business can gain from this.

What you need to ask before hiring a small business accountant

Do you have your CPA? CPA stands for ‘certified public accountant’. CPA maintains accepted financial and economics knowledge structure and organizes state-administered tests to prove competency and also has periodic certification exams. Yes hiring a CPA accountant might be costlier, but you may not want to take any chances and go with someone like this. So always ask this question.

Do you offer business advice? A really good accountant should be doing more than just filling out forms and filing returns. He should be offering business advice too. So it is necessary to test the credibility of the candidate and the depth of knowledge the person posses One should crss check with the experience of the candidates.

Who are your other clients? Experience is crucial. So always check out whether the accountant has a minimum years of experience or not. If the person has an experience in the sort of business you run, then that is great. The exact nature of the work for an accountant can also vary quite a lot ranging from simple tax filing to more complicated jobs such as Payroll administration to Litigation support to Business Valuation and others. Do remember that the more kinds of jobs an accountant has done indicates the range of his experience.

Are you stamping your space in the local business? Every small business can do with some help and many good accountants can offer a great deal of this. Trace your popularity by checking whether other accountants refer you to clients, businessmen and corporate houses.

Why should I choose you? it’s always a great idea to let the accountant make a case for himself. Look out for the most unique answers and find out how such answers can fit your needs the best.

Here are a few sample questions that will help you select an accountant


• “How will you help my business grow?” Ask for a plan.
• “I need additional funding because my business is growing. Which lenders can help me and how long will it take to get the money?”
• Are you into tax preparation or do you plan the taxes too?”
• “Can you set any benchmarks so that I can track my projects?” An efficient small business accountant can set up a month-by-month goals that can chart the progress.
• “Can you provide other services apart from business advice, gift planning, legal referrals and others?”

It is always a great idea to make a list of all these questions before you are having a talk with the person. Never take a decision unless you have had a conversation with at least 2 accountants.

Once you have got satisfactory answer from someone, try to meet that person face to face before you make up your mind. This is important because the performance of your small business can depend on the efficiency of the accountant and how much, and in which areas, he can help you in. Face to face interactions can often be extremely revealing. Also, find out if the person will work directly on your account or if an employee would be doing so.

Analysis of Income and Investments

For tax purposes, income can be divided as ordinary income and capital gains. Ordinary income includes compensation for personal services such as wages and salaries, business profit and interest income from invested funds while capital gain generally comes from the sale of investment property.

As with any business enterprise, conducted for profit, ordinary and necessary costs associated with day-to-day operation and management may be deducted from income.

Role of Financial Accountant in tax saving

For all your personal and business returns, tax accountant can deliver timely and accurate assistance. The key part of an accountant is to provide tax preparation services and tax help. Here are some of the ways how a tax accountant can serve you in your business decisions:

• Assist you in analyzing your financial statements
• Prepare tax returns and assist with tax planning
• Prepare tax returns and assist with tax planning
• Act as your advisor and sounding board in financial and administrative matters

A tax accountant can help you in identifying ways that can minimize your tax liabilities and other basic needs for tax preparation services as: timeliness; accuracy; customized tax strategy; and managing a complex tax situation.

For your taxation purposes, you should seek out the advice of a licensed tax professional, such as a Certified Public Accountant or an Enrolled Agent. These are highly-trained tax professionals who specialize in helping their clients pay the least tax possible.