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Use of long distance and bundled; example form
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I received the following inquiry via email:
I was reading over your article and in attempt to understand the difference between the "long distance" column and "bundle" column, I used all your numbers to do the calculations. My main confusion is about the long distance + bundle options. If I have a cell phone national plan, then I would think it is technically a bundle package. But your article makes it sound like both a long distance and bundle option, which effectively doubles my refund.
I don’t exactly understand how it all works, either. As I went through the TurboTax steps, it asked me to fill in what I had paid in FET and then asked if the payments had gone towards bundled service. As a cell phone national plan is specifically identified as qualifying as a "bundled" service, I selected yes. Then, I scanned the resulting documentation which TurboTax automatically generates and found the form to be as you see it in Figure 3.
And besides that main confusion above, I don’t understand your form 8913. I understand column C, it is the total based off all non gray cells with respect to their groups. What I do not understand is column b. It seems as if initially, all the columns ($3, 5, 5, 5, and so on) are from just your phone line #1. But once it hits $11, it seems to be factoring in phone line #4, which you grayed out because you were reimbursed. What happened there?
I noticed the discrepancy as well, and double-checked my numbers to be sure I hadn’t included anything extra. I hadn’t, and so the only explanation I could come up with is the way the system rounds the refund amounts. Additionally, I only input one set of values, not one set for "long distance" and one set for "bundled" service. Somehow, though, TurboTax came up with different numbers in columns B and C – again, the only explanation for which I could determine being rounding (i.e., maybe the rounding rules are different for the two columns, or maybe only a percentage of column B applies to column C?).
My main concern is if I can claim my cell phone national plan on both column b and c, or just c. It seems a little strange to claim both because I was just charged the tax once.
You’re correct it should only be claimed once if it was only paid once. However, there seems to be some nuance in the system that allows bundled service to go in both columns, effectively bumping up your refund.
If you are doing the calculations by hand, I suggest giving the instructions a careful look to see if you can determine what step leads to this. If you can’t identify one and your potential tax increase would outweigh the cost of something like TurboTax, then I suggest using it.