Advance Steps to Take BEFORE a Disaster
As I write this, Hurricane Milton is taking aim at the west coast of Florida, promising to be a devasting disaster. This on the heels of Helene that brought incredible devastation to seven different States not yet two weeks ago.
Closer to home, we are all aware of natural disasters that have severely affected our neighbors here in Arkansas, such as the tornadoes that ripped through Little Rock and surrounding areas last year.
Consequently, this seems to be a relevant time to remind individuals and businesses alike to implement important protective safeguards that will greatly help you in the event of a natural disaster.
Here are a few simple steps you may want to take:
Create a Backup Set of Records Electronically
You should consider keeping a set of backup records in a safe place. The backup should be stored away from the original set.
Keeping a backup set of records, including, for example, bank statements, tax returns, insurance policies, etc. is much easier now that many financial institutions provide statements and documents electronically, and so much financial information is available on the Internet.
Even if the original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a backup storage device, like a flash drive.
There are also online backup services that provide this service for a fee. This can be a convenient way to safeguard your records and other things of value to you.
Document Your Valuables
Another step you can take to prepare for disaster is to photograph or even record on video the contents of your home or homes, especially items of higher value. The IRS even has a disaster loss workbook, Publication 584, which can help you compile a room-by-room list of belongings, as do many insurance companies. Financial management software such as Quicken also have documentation tools.
A photographic record can help someone prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area, or backed up in a secure place, as discussed above already.
Update Emergency Plans
Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs.
When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly, and employees should be informed of the changes.
Check on Fiduciary Bonds
Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider. This can protect your business in the event the payroll service provider is affected by a disaster.
Where to Get Help
If disaster strikes, there are often important tax benefits and other government programs that can help you weather the storm (no pun intended). For instance, it is sometimes possible to amend already filed tax returns to claim a casualty loss and speed up the refund of tax money that you might other wise have to wait until the next tax filing time to receive.
Another example, tax filing and payment deadlines are often extended in areas that are designated by the IRS as disaster areas. The areas recently affected by Hurricane Helene have had their tax filing deadlines extend until May 15, 2025, for instance. Typically States will also provide filing relief.
An affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues for further assistance.
And, if needed, back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Alternatively, transcripts showing most line items on these returns can be ordered on-line, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.
