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Natural Disasters: 3 Tips for Safeguarding Tax Records

Business

from Carr, Riggs & Ingram

Don’t let a natural disaster become a tax disaster too. Be sure to protect your tax records and other valuable information. This time of year it is especially important to utilize the tips below in preparation for hurricane season.

1. Electronic Backup

Taxpayers should always keep a set of backup records of all important documents such as bank statements, tax returns, and insurance policies in a safe, separate location such as a safety deposit box or with a trusted relative. Of course, maintaining backup records is more convenient than ever before because so many financial institutions provide statements and documents electronically via the internet. Original paper records can easily be scanned into an electronic format with a traditional scanner or any number of apps designed to scan documents right from a smartphone. With documents in electronic form, taxpayers can then download them to a backup storage device (e.g. external hard drive), burn them to a CD/DVD or USB flash drive, or upload the documents directly to a cloud-based document storage application.

2. Document Valuables

Another preparedness tip all taxpayers can utilize is to photograph or record the contents (especially items of higher value) in his or her home and store these tapes in a separate location. Taxpayers can compile a room-by-room list of belongings that will be useful for insurance purposes, as well. A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored in an easily accessible cloud-based document storage application, USB flash drive, or with a trusted family or friend outside the potentially affected area.

3. Emergency Plan Updates

Since personal and business situations change over time, as do preparedness needs, emergency plans should be reviewed and updated annually. When hiring new employees or changing operational functions, plans should be updated accordingly and employees should be informed. Make sure to also check evacuation routes.

Utilize these tips to protect against a hurricane or any natural disaster (or even personal disasters such as fire in your home or office). If you have questions about how best to safeguard important documents so that they can be accessed no matter what Mother Nature throws at you, just contact your CRI professional.

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