Mr. CPA, With so many disasters occurring what precautions do I need to take regarding by taxes and tax information?
That is another good question. The IRS has provided the following tips on their website.
How to Prepare Before a Disaster Strikes
IRS Summertime Tax Tip 2011-03, July 11, 2011
A home disaster can be stressful enough without reconstructing important records and accounting for belongings. The Internal Revenue Service encourages taxpayers to safeguard their financial and tax records before disaster strikes. Listed below are four simple tips for individuals on preparing for a disaster.
- Take advantage of paperless recordkeeping for financial and tax records. Many people receive bank statements and documents electronically and important documents like W-2s and tax returns can be scanned into an electronic format and stored on a flash drive or CD in a safe place. Keep it with other essential documents like home-closing statements, vehicle titles, insurance records and birth, death or marriage certificates and legal paperwork. Some online services can automatically back up computer files and store them offsite. Regardless of how you save your documents(whether it is electronically or on paper) ensure they are safe from the elements, but also encrypted and/or locked up to guard against disclosure or theft.
- Document Valuables The IRS has disaster loss workbooks for individuals that can help you compile a room-by-room list of your belongings. One option is to photograph or videotape the contents of your home, especially items of greater value. You should store the photos or video in a safe place away from the geographic area at risk. This will help you recall and prove the market value of items for insurance and casualty loss claims in the event of a disaster.
- Update Emergency Plans Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches or if a fire occurs.Review your emergency plans annually.
- Count on the IRS In the event of a disaster, the IRS stands ready to help. The IRS has valuable information you can request if your records are destroyed. If you have been affected by a federally declared disaster, you can receive copies or transcripts of previously filed tax returns free of charge by submitting Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return. Clearly indicate the official name of the disaster in red at the top of the form, to expedite processing and waive the usual fee for tax return copies.
For more information type “Preparing for a Disaster” in the search box at www.irs.gov.
Preparing for a Disaster
Publication 584, Casualty, Disaster, and Theft Loss Workbook
Form 4506, Request for Copy of Tax Return (PDF)
Form 4506-T, Request for Transcript of Tax Return (PDF)
Preparing for Disasters: English | Spanish | ASL
The tip about paperless records can help not only in the event of a disaster but it can help you clear out all that paper out of your house. See my previous post about virtual storage. Also, see this post about how long to keep tax records.
Want assistance from a CPA experienced in preparing tax returns for the public? Contact me using my information below.
Jeff Haywood, CPA
I prepare the following types of tax returns:
Federal and State Returns
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For a full list of prior posts see the CPA Tax Blog.
As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.
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This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.