Transcripts

"Kevin McCormally's Tax Tips"-Long Distance Telephone Tax

SUSIE GHARIB: The calendar says April, so it's time to get going on getting your Federal income taxes filed. The deadline is just 15 days away now, Tuesday, April 17. But if you're one of the millions of Americans who have already filed, don't look so pleased. You may have overlooked one thing that could have helped you. For an explanation, here's our tax expert, Kevin McCormally, editorial director of "Kiplinger's Personal Finance."

KEVIN MCCORMALLY, EDITORIAL DIR., "KIPLINGER'S PERSONAL FINANCE": With procrastinating taxpayers scrambling to finish up their returns over the next couple of weeks, I've got bad news for millions of Americans who may be feeling a little bit smug because they've already done the deed. They need to do a do-over because a goof on their return cost them money. I'm talking about the 20 million or more Americans who already have failed to claim the one-time only refund of the long distance telephone tax. I call this the billion dollar boo-boo because early filers have left more than one billion extra refund dollars on the table.

A quick review, after a Federal judge ruled the 3 percent excise tax on long-distance calls illegal, the government decided to refund 41 months' worth via credits on this year's tax returns. Nearly everyone who has a telephone deserves this refund and to save you the trouble of figuring out how much tax you actually paid, the IRS set standard refund amounts based on the number of exemptions you claim on your return. It's $30 for one exemption, $40 for two, $50 or three and a $60 credit if you claim four or more.

If you missed this free money when you originally filed, you can still get your share by filing an amended return using form 1040X. That form actually has a special line on it for claiming this refund, so it's clear the IRS expected a lot of taxpayers to make this mistake. Now, it might sound like a pain to file another tax return just to recover $30 to $60 bucks. But, believe me, you can leave most of the 1040 blank.

To make it even easier for you to get your money, we have a link on the NIGHTLY BUSINESS REPORT web site to a step-by-step explanation of how to fill out the form. And, if you're still working on your return, be sure to claim this refund in the first place.

I'm Kevin McCormally.

Click the links below to download 1040X and instructions on how to fill it out from the IRS.

• Form 1040X (PDF)
• Form 1040X Instructions (PDF)