Hurricane and Wildfire Season Is Here: Are Your Tax Records Protected?
June marks the beginning of hurricane season in many parts of the United States and wildfire season in others.
While most people think about protecting their homes and families, it's equally important to protect the financial and tax records you may need after a disaster.
The IRS recently reminded taxpayers that a little preparation today can save significant stress and frustration later.
Start With Important Documents
- Tax returns
- Supporting tax documents
- Property records
- Insurance policies
- Estate planning documents
- Vehicle titles
- Business records
- Nonprofit financial records
Store digital copies securely in cloud storage or on an encrypted external drive kept in a separate location.
Take Photos of Valuable Property
- Furniture
- Electronics
- Appliances
- Artwork
- Jewelry
- Tools and equipment
- Business assets
These records may make it easier to support insurance claims and document losses if a disaster occurs.
Create and Maintain an IRS Online Account
- Tax transcripts
- Account balances
- IRS notices
- Payment history
- Filing information
If your paper records are lost, online access may help you obtain information needed to reconstruct your tax files.
Businesses and Nonprofits Should Take Extra Precautions
Business owners and nonprofit organizations should also protect accounting files, payroll records, vendor contracts, donor records, grant documentation, board minutes, and organizational documents. Cloud-based systems provide additional protection.
Tax Relief May Be Available After a Disaster
When a major disaster receives a federal disaster declaration, the IRS often provides extended filing deadlines, payment relief, and penalty relief. Taxpayers in designated disaster areas frequently receive this relief automatically.
Don't Wait Until Disaster Strikes
Taking a few hours now to organize records, back up documents, and document valuable property could save days or weeks of work later.
Need Help?
If you're unsure which tax and financial records should be retained or how long to keep them, contact me directly.
I offer a free consultation and can help you develop a recordkeeping system that protects your information and makes tax season easier.
This article is for informational purposes only and does not constitute tax advice. Every situation is different, especially when multiple years of unfiled returns are involved.