Disaster Preparedness: How Safe are Your Tax Documents?
As the East Coast braced for Hurricane Irene, one of the most massive hurricanes in history, millions evacuated and tried to prepare for the disaster. With hurricane season upon us and unexpected disasters occurring, like last weeks earthquake on the East Coast, there are precautions that individuals and businesses need to take to safeguard their assets. Individuals were given warning about Hurricane Irene, but do you know how to safeguard your documents from this and other types of disasters, expected and unexpected? If your tax returns were lost as a result of a disaster, do you know how to get duplicate information? This week, ABC news shared important tips on preparing for evacuation, but what about advice on safeguarding important documents such as your tax returns, bank statements, and insurance policies? Here are some tips to help you before and after a disaster strikes:
Create an Electronic Backup Set of Records
- Taxpayers should keep a set of backup records in a safe place away from the original set. Also, keep in mind that financial institutions provide documents and statements electronically, available on the internet. These documents can be downloaded to a backup storage device or burned to a CD.
- If you prepared your taxes using tax software, always save your return as a PDF file. This step can assist you when you need to access your adjusted gross income for tax purposes or if documentation is required for loans.
- As an additional safeguard, I always suggest that you email your PDF file(s) to your email address so that even if your computer has had enough, you can still access your emailed PDF file from any computer.
Order Transcript or Copies From the IRS
- Still can’t access backup copies of your tax return? The IRS can help. You can request backup copies of previously filed tax returns and all attachments by filing Form 4506.
- You can also request transcripts by filing Form 4506-T. Transcripts show most line items including your adjusted gross income. Transcripts can also be ordered online or by calling (800)908-9946.
- Special tax law provisions may help taxpayers and businesses recover financially from the impact of disaster especially when the federal government declares their location to be a major disaster area. Click on IRS’ s Disaster Assistance and Emergency Relief for Individuals and Businesses for more information.
- If you are affected by disaster, you can also call (866)562-5227 to speak to a specialist trained to handle disaster related issues.
- For additional information regarding assistance in the event of a disaster, check the IRS Disaster Losses Kit for Individuals.
- Taxpayers should photograph or videotape contents of their home to help prove the market value of items for insurance and casualty loss claims. Photographs and videotapes should be stored with friends and family outside your area.
Update Emergency Plans
- Personal and business preparedness needs can change over time. Emergency plans should be reviewed and discussed with all involved annually.
Check on Fiduciary Bonds
- If your business uses a payroll service provider, ask if it has a fiduciary bond in place. The bond could protect you as an employer in the event of default by the payroll service provider.