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Will You Make The 39 Cent Mistake This Tax Season?
By: Wayne M. Davies
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!
About the Author:
Wayne M. Davies is author of 3 tax-slashing eBooks for small business owners and
the self-employed. For a free copy of Wayne's 25-page report, "How To Instantly
Double Your Deductions" visit www.YouSaveOnTaxes.com
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