Be Careful How You Mail Tax Return and IRA Contributions

Wednesday, March 26, 2014

By Jeffery Levine, IRA Technical Expert  

Follow Me on Twitter: @IRAGuru4EdSlott

Have you ever been to the post office on April 15th? If not, I wouldn’t recommend it. It’s a zoo. Chances are that if you ever make such a trip, the lines will be long and the wait even longer. Why? Because all the last-minute procrastinators are there to send out their tax returns.

As you may know, the tax code contains a “timely mailed, timely filed” rule that treats a tax return as timely filed as long as it is sent by the due date, even if it is not received by IRS until after that deadline. This rule also extends to IRA contributions. IRA contributions must be made by April 15th of the year following the year for which the contribution is being made.

For example, 2013 IRA contributions can be made up until April 15, 2014. If you timely mail contributions by the deadline, those contributions will be considered timely – even if they are not deposited into the IRA until after the due date.

The best advice, of course, is to take care of any tax matters as soon as possible and not wait until the last second, or close to it. As we know, however, in reality sometimes that’s just not what happens. So, if you find yourself making an 11th hour IRA contribution or a last-minute filing, just be careful. Not all methods of sending your IRA contribution/tax return are acceptable if you want to take advantage of the timely mailed, timely filed rule!

Sending your contribution/return by United States Postal Service (USPS) is clearly OK, as evidenced by those long April 15th lines. If, however, you want to bypass those lines and use another service, you must be sure it’s an IRS approved private delivery service (PDS).

The current the list of designated PDSs is as follows:
1. DHL Express (DHL): DHL Same Day Service;
2. Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First; and
3. United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

This information is available on the IRS’ website at the following address:
www.irs.gov/uac/Private-Delivery-Services-(PDS)
 

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