The Importance of Safeguarding Tax Information

With the tax deadline officially past and the peak periods for natural disasters rapidly approaching in Florida and elsewhere in the U.S., taxpayers across the country are being encouraged to take steps to protect their important tax and financial information. Such preparation can go a long way towards helping taxpayers feel secure, especially in light of the fact that this year alone, the Federal Emergency Management Agency (FEMA) has issued 25 major disaster declarations in 15 states because of storms, flooding, tornadoes, wildfires, and mudslides.

Securing Originals and Making Copies 

Those looking to prepare for a natural disaster should be sure to keep important documents, like Social Security cards, marriage and birth certificates, tax returns, and land ownership deeds somewhere safe, ideally in a waterproof container. These are not, however, the only documents that should be saved. In addition to original documents, taxpayers should consider making copies of these records and storing them in a different location, like a safe deposit box or with a trusted friend or family member who lives in a  different area. Alternatively, scanned documents can be stored easily on a number of devices. These records may be necessary when filing insurance claims, requesting assistance from the IRS, or otherwise trying to move on after a natural disaster, so keeping them secure is of the utmost importance.

Keeping a Record of Assets

 It’s also a good idea, especially for those who live in areas with a high risk of certain natural disasters, like Florida, to keep a careful record of their assets, particularly those with a high value. Even a simple list with photos or videos can make it easier to file insurance claims and request tax benefits after a disaster. Valuable assets could include everything from real estate and vehicles to artwork and personal possessions.

Replacing Tax Records 

Unfortunately, even those who use the greatest care when trying to preserve and protect their financial records and tax documentation could end up needing to reconstruct or replace these records after a natural disaster in order to claim federal assistance. In these cases, taxpayers should consider ordering a free tax return transcript from the IRS, contacting title, escrow companies, and banks that handled the purchase of real property, obtaining current property tax statements from the county assessor’s office, reaching out to the mortgage company for copies of documents establishing fair market value, and collecting copies of insurance policies. The more accurately a person is able to recreate these records, the better able he or she will be to estimate the amount of losses sustained, which can affect the kinds of tax benefits for which a taxpayer is eligible.

Obtaining Tax Relief After a Natural Disaster 

Many taxpayers who live or work in disaster areas qualify for tax relief benefits offered by the IRS. At the office of Ronald Cutler, P.A., an experienced CPA, former FBI Special Agent, and dedicated Florida and nationwide tax lawyer can walk you through your legal options following such a disaster. Call us at 386-490-9949 to get started.

Sources:

 irs.gov/forms-pubs/about-publication-584

irs.gov/newsroom/reconstructing-records-after-a-natural-disaster-or-casualty-loss