Natural disasters, fires, floods, and storm damage are all extremely detrimental in more ways than one. Planning what to do in case of a disaster is an important part of being prepared, and safeguarding your financial records are no exception.
Our Pittsburgh Tax Pros can answer questions regarding tax preparation and financial record keeping. Contact us today at (412) 931-1617.
On IRS.gov, the Internal Revenue Service lists some simple steps that can help taxpayers and businesses protect financial and tax records in case of disasters where there is significant property damage that can destroy important records.
Take Advantage of "Paperless" for Financial and Tax Records
Many people receive bank statements and other financial and bank documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s and tax returns can be scanned onto an electronic format and saved in a cloud storage setting or on an external hard drive. Be sure you back up your electronic files and store them in a safe place. Making duplicates and keeping them in a separate location is also a good business practice.
When choosing a place to store important records like financial documents or external hard drives, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home is also likely to affect other facilities nearby, making quick retrieval of your records difficult or totally impossible.
Document Valuables and Business Equipment
The IRS has disaster loss workbooks for individuals ( Publication 584, Casualty, Disaster, and Theft Loss Workbook) and businesses ( Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook) that can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.
Check on Fiduciary Bonds
Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.
Continuity of Operations Planning for Businesses
Quickly recovering for a disaster is all dependent upon the emergency planning you do today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs.
Here are some tips for
Get informed about hazards and emergencies and learn what to do for specific hazards.
Develop an emergency plan & document the details.
Back up your computer data systems regularly.
Decide how you will communicate with employees, customers and others.
Practice and maintain your plan.
- Update it annually as necessary.
Request Documents from the IRS
Immediately after a casualty, you can request a copy of a return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return (PDF).
If you just need information from your return, you can order a free transcript by calling (800) 829-1040 or using Form 4506-T, Request for Transcript of Tax Return (PDF). Requests for Transcripts are also available using the online and mail options found on the Get Transcript page. Transcripts are available for the current year and returns processed in the three prior years.