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It’s Natural Disaster Season: Safeguarding Tax Records

Aug 2, 2023 | Accounting, Individuals, News, Newsletter, Taxes

With hurricane season in the East and South, wildfire season in the West, and severe weather season in the middle of the county, now is a good time to create or review emergency preparedness plans for surviving natural disasters. Here are three steps taxpayers can take to safeguard their tax records before disaster strikes and minimize negative tax consequences should a disaster occur:

1. Secure key documents and make copies. You should place original documents such as tax returns, birth certificates, deeds, titles, and insurance policies inside waterproof containers in a secure space. Duplicates of these documents should be kept with a trusted person outside your geographic area. Scanning them for backup storage on electronic media, such as a flash drive, is another option that provides security and portability.

2. Document valuables and equipment. Current photos or videos of your home’s or business’s contents can help support claims for insurance or tax benefits after a disaster. While all property should be documented, it’s especially important to record expensive and high-value items.

5. Get assistance from a tax professional. After FEMA issues a disaster declaration, the IRS may postpone certain tax filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Taxpayers who do not reside in a covered disaster area but suffered impact from a disaster may qualify for disaster tax relief and other options. Reconstructing records after a disaster may be required for tax purposes, getting federal assistance, or insurance reimbursement. A tax professional can help you determine what tax relief you’re eligible for and even assist with reconstructing records. If you have suffered a natural disaster, please call the office immediately for assistance.