When it comes to filing your tax return, spending 39 cents
could be the biggest mistake you ever make.
Millions of taxpayers make the mistake of putting their
income tax return in a regular letter-sized envelope,
sticking on a 39 cent stamp, and placing the envelope in
the mailbox.
And millions of taxpayers "get away" with this mistake
year after year.
Why do I say that putting your tax return in the mailbox
is a mistake? Let me explain.
Every year, a small percentage of mail doesn't get
delivered. The U.S. Postal Service doesn't like to admit
this, but it's true.
Furthermore, even if your tax return gets delivered to the
IRS, every year a small percentage of tax returns get lost
by the IRS.
Don't believe me? I'll never forget the day one of my
clients showed me a letter he received from the IRS:
"We regret to inform you that we received your return....
but have lost it."
Believe it or not, this actually happened!
So my question to you is this: What are you doing to do if
this happens to you?
If your tax return doesn't get delivered, or if it gets
delivered but is subsequently lost inside the mammoth IRS,
what are you going to do to prove that you actually mailed
the return?
Just calling the IRS and saying, "Well, I mailed it on
time. I know I did!" isn't going to prove anything. And
the burden to prove you mailed the return on time will rest
on your shoulders.
You have two ways to solve this potentially dangerous
problem:
OPTION #1: File your return electronically.
There are many benefits to e-filing:
-- Accuracy. In order for a return to get e-filed it must
pass several strict accuracy tests, thereby significantly
reducing the chance of human error. E-filed returns are
subject to this level of scrutiny at the point of
origination.
-- Security. The filer creates his own electronic
signature, resulting in a truly paperless experience.
-- Speed. If you're due a refund, it can take 6-8 weeks
with a paper return. Combined with direct deposit, your e-
filed return will generate a refund in as little as 10 days.
-- Proof of acceptance. This is the benefit I want you to
focus on right now. When you e-file your return,
you receive an electronic acknowledgement within 48 hours
that the IRS has accepted your return.
Bingo! Now you have proof positive that the return was
filed. 'Nuff said?
E-filing is rapidly becoming the filing method of choice.
But the majority of returns are still filed on paper,
so here's a second way to avoid the "missing return"
dilemma.
OPTION #2: If you're a "paper filer", go to the post office
and spend a measly $4.05 to send the letter via Certified
Mail, Return Receipt Requested.
Doing this will accomplish two very important things:
1. Certified Mail (which costs $2.40) provides the proof
that the return was mailed, and that it was mailed on time,
on or before the due date.
According to the IRS, a paper return is filed on time if it
is mailed in an envelope that is properly addressed and
postmarked by the due date. When you use Certified Mail,
you will get a receipt postmarked by the postal employee,
and the date on the receipt is the postmark date.
So, should the return get lost by the IRS, or if the IRS
questions whether you mailed it on time, you will have
written proof.
Plus, every piece of Certified Mail is assigned a tracking
number which can then be traced by the U.S. Postal Service
should a problem arise.
2. Return Receipt provides another level of insurance.
For an extra $1.85, when the letter is delivered, the
IRS must sign or stamp a receipt that documents the date of
delivery. This receipt then gets mailed back to you, so
you now have the written proof that the IRS received it.
Technically, you only need to send the return via Certified
Mail to prove that it was mailed on time. But I
really like the Return Receipt as well -- it gives you that
extra "peace of mind" to know that the IRS received it. And
you'll know exactly what day it was received. This is the
proof of delivery.
So don't run the risk of having your tax return get lost in
the mail. And don't run the risk of having your tax return
get lost in the piles and piles of paper that flood the
IRS each year.
Think about it. Well over 100 million personal income tax
returns are filed with the IRS every year, and the majority
of them are still prepared on paper and mailed by the U.S.
Postal Service.
The U.S. Postal Service and the IRS are staffed by hard-
working people who are only human. People make mistakes.
To greatly reduce the chance of a mistake being made with
your return, don't you make the mistake of just putting your
tax return in the mailbox.
Instead, e-file it, or take it to the post office and
send it Certified Mail, Return Receipt Requested. It could
be the best $4.25 you ever spent!
