The recent natural disasters in Texas and Florida are unfortunate reminders of why we should take National Preparedness Month Seriously. Indeed, Southern California is not likely to be affected by a hurricane, but earthquakes and wildfires remain real dangers.
As part of National Preparedness Month, the IRS stands ready to help taxpayers in federally declared disaster areas to help with applicable issues. In the midst of being prepared, however, it is important to take the following steps to protect important documents.
Make electronic copies – Having a duplicate, electronic set of key documents, such as your mortgage, tax returns and insurance policies is a prudent step in being prepared. Not only are electronic copies easier to keep together (in the event you have to evacuate quickly) they may be easily retrieved in the event the paper versions are destroyed.
Document valuables - You may have already completed this for insurance purposes, but documenting your valuables, by taking photographs or maintaining a log, is a good way to memorialize your losses in the event of a disaster. This also is important in making casualty and insurance claims. The IRS’ disaster loss workbook is a valuable resource.
Check on fiduciary bonds – For employers who rely on payroll service providers, it is important to ensure that such a provider has a fiduciary bond that would protect the employer in the event the service provider cannot meet its financial obligations.
If you have additional questions about maintaining records for tax purposes, an experienced attorney can advise you.