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Phone bills, whether received online or in paper form, usually summarize their charges in the following manner, with some variations from phone company to phone company:
1) At the top there is a summary of charges, showing previous balances, payment received and current balance.
2) Next is a list of the products and services you currently use.
3) If you subscribe to both local and long distance services from the same carrier, the next section is a summary of your local services, starting with the features you have and their monthly cost.
4) Other charges and credits are listed, including any premises work you may have had completed.
5) Taxes and surcharges are listed in a separate section. This is often the most confusing section in the entire bill but many phone companies include an explanation of these charges on their website.
6) Next comes a description of your long distance services and charges, if you use the same carrier. If you use a separate carrier, this information will be supplied on a separate bill from that carrier. If you do have service from your local carrier and have a package deal, in-package and out-of-package charges will be summarized here.
7) A section called Other Charges and Credits is usually next, which usually only contains your Universal Connectivity Charge, also called the FCC Universal Service Fund, Federal Universal Service Fee, Carrier Universal Service Charge or Local Service Subsidy. This is a percentage charge that goes to the FCC that everyone has to pay.
8) Last, but not least is a section that summarizes your federal and state taxes.
Getting more out of the new 2006 tax credit means having 41 months worth of old phone bills. What can you do if you no longer have your old phone records?
If you are an AT&T customer, AT&T is making these records available online for all customers for the period of time in question.
If you are not an AT&T customer, contact the customer service center for your carrier. Most will have these old records and will make them accessible to you for a slight fee unless you live in a state that has suspended such fees. In Ohio, you will get your records free.
Keep in mind that the difference in your tax credit may not justify the additional time, or fees associated with getting these records.
The array of taxes and supplemental charges on your bill can be quite confusing. Here is a brief summary of each, and what it covers.
The Federal Excise Tax was challenged and no longer applies after September 2006. It was a tax levied on both local and long distance services by the federal government.
The FCC Subscriber Line Charge is a fee that reimburses local telephone companies for the right to use their networks to route long distance calls. This tax is called different things by different carriers, but is basically the same thing; a tax created by Congress in 1983 that amounts to typically $6/line.
The Local Number Portability Charge or LNP is a charge assessed through a law passed by Congress in 1996 to cover the costs carriers incur in upgrading their networks so that switching carriers doesn't mean switching phone numbers.
911 Emergency Service Fee and Equalization Surcharge are both fees assessed to cover the costs of emergency phone services.
The Gross Receipts Tax Surcharge is a tax that goes to local governments, and is assessed differently in different areas of the country.
A PICC or Presubscribed Interexchange Carrier Charge is a fee that long distance carriers pay to local carriers for the use of their networks. This, by law, doesn't have to be passed on or shown to consumers, so it can appear in many different ways on your phone bill. This is also another great reason to stick with one provider for both long distance and local services.
The Universal Service Fund Charge is a charge assessed that subsidizes phone service for the poor and in rural areas. It also varies from location to location.
These are the main additional charges on a typical phone bill, but can vary slightly in different areas.
No, this is not a rumor and you actually do get a federal tax credit from your phone bills this year - claimable on line 71 of your form 1040 tax return.
The Federal Excise Tax has been charged through your phone company for years and was based on how far each call was made and how long you talked.
It was challenged in court after phone companies started offering flat rate home phone service and declared unnecessary. After all, if you pay a flat fee, your costs don't depend on how far or how long you talk.
Phone companies were given notice to stop charging the excise tax as of August 2006, so you should have no charges on your phone bill for excise taxes starting in September.
The challengers of this tax also demanded restitution, so if you file as a single, you can claim $30. This climbs to $40 if you have one dependent or are married filing jointly. If you are married with children, you can claim $50 if one child, and $60 if two children.
If you actually have all your old phone bills, you can claim more, but must attach a special form to your return.
The most common question asked by homeowners today is "How do I lower my phone bill?"
The best way to make sure you are always paying the lowest rate is to shop around for services at least every two months. The telecommunications industry is constantly in a state of flux, so search around regularly to ensure you are getting the best deal.
Next, read the fine print in your phone bill. Some services have ultra low rates, but charge you a "connection fee" for every call and that can add up.
If you pay a monthly fee for a particular amount of minutes of long distance time, keep a timer by your phone and a log so you will know when you have exceeded your alloted minutes. Once you exceed this allotment, many carriers charge high rates for additional minutes.
Another option that many are choosing is the use of a VoIP flat rate service for unlimited local and long distance. Be sure to check the call quality of these services, and make sure that you can live with them.
Other options include using Skype as a supplementary service or choosing a service, such as AT&T, that allows free calling to other subscribers in their network.
For your convenience, many residential phone services such as AT&T allow you to view and pay your bill at your online brokerage, banking or billpaying site. This allows you to consolidate your bill paying and financial management to one convenient site.
There are many sites that allow you this option. Many banks provide that option for free, as well.
Online bill paying is a great convenience and allows you to schedule and pay bills in advance so that you are always on top of the game.
It also allows you to easily transfer your data to a financial management program, such as Quicken or Microsoft Money.
If you are traveling, or expect a low phone bill for a period of time, most phone service providers provide a plan called deferred billing. If you are an AT&T customer and sign up for deferred billing, you will not be required to pay your phone bill until it has reached $30 or more in long distance charges or in 90 days, whichever comes first.
Low income customers can also sign up for a deferred payment program through lifeline.org. This service can be used if the loss of a job or other hardship leaves you unable to pay the full amount of your bill.
Online billing is available from most phone carriers, and not only saves trees, but is very convenient as it allows you to access your bill at any time, from anywhere.
As an online billing customer, you can request listings for numbers that you don't remember dialing, sort your calls by date, time, minutes, and other categories and even print your bill for filing and later retrieval.
Email notifications are available when your bill is ready and having your bill online allows you to review it while working.
Online bills can be saved into a desktop folder on your computer, and compared against your budget for better financial management.