How Natural Disasters become Tax Disasters…

Natural Disasters

I know…I know, you’re right, it’s not tax time!!  However, it is hurricane season.  That’s why I thought I would give a head’s up on how to avoid or at least minimize records and valuables that can be lost due to natural disasters.

  1. Take advantage of electronic records. If you’re like me, you may already be taking advantage of bank and other financial statements online. If this is the case, your information is already securely stored. Also, keep an additional set of records electronically. One way is to simply scan tax records, insurance policies, birth certificates and the like, onto an electronic format. You may want to download important records to an external hard drive, USB flash drive or burn them onto CDs. Keep duplicates of your records in a safe place. For example, store them in a waterproof and or fireproof container, such as a safe, away from the originals. If a disaster affects your home, it may also affect a larger area. If that happens, you may not be able to retrieve the records that are stored there.
  2. Document Valuables. Take pictures or create videos of the contents in your home and business. Visual records could help you prove the value of your lost things. They could be helpful with insurance claims or casualty loss deductions on your income tax return. Store these in a safe place as well. For example, store them with a friend or relative who lives out of the area.
  3. Here’s a good one!  Start a ‘records exchange’ with trusted friends and family members in other areas.  This way, everyone knows just where their backup records are and how to retrieve them.  This can be very useful to those that don’t have ready access to the necessary technology to electronic storage.

 

Hope this helps