Financial Resource: Beginner Investing to Financial Independence!

Early mistakes found on a sample of 2006 returns filed during January include:

• Filling out the Form 1040EZ-T , Request for rapid tax refund of Federal Telephone Excise Tax , incorrectly by failing to show a refund amount on Line 1a. Designed exclusively for requesting the telephone-tax refund, this simple form is for people who don’t need to file a regular income-tax return. Filing an incomplete form typically delays a refund anticipation loan and often leads to follow-up correspondence with the IRS. More than 10 million low-income people, many of them senior citizens, are expected to file this form.

• Failing to request the telephone tax refund faster on a regular federal income-tax return in situations where the taxpayer appears to qualify. More than one-third of early filers did not request the telephone tax refund. This includes filers on Forms 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ. About 136 million individuals and couples are expected to file one of these forms, and most will, likely, qualify for the telephone-tax refund. Anyone who files one of these forms cannot file Form 1040EZ-T.

• Filing duplicate requests. Usually, this involves filing both Form 1040EZ-T and a regular income-tax return. Anyone who files a regular return cannot file Form 1040EZ-T. Doing so will delay any refund for months and result in a phone call or letter from the IRS.

• Requesting a refund that appears to be based on the entire amount of the taxpayer’s phone bills, rather than just the three-percent tax on long-distance and bundled service.

• Requesting a federal or state tax refund in the thousands of dollars, suggesting that the taxpayer paid more for telephone service than they received in income.

If you enjoyed this post, make sure you subscribe to my RSS feed!