Prepare for Disasters by Safeguarding Important Information
No doubt we are all aware of the series of recent natural disasters that have severely affected our neighbors here in Arkansas and surrounding states.
Consequently, this would seem to be a good time to remind individuals and businesses alike to implement important safeguards against natural disasters.
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 easier now that many financial institutions provide statements and documents electronically, and 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 an external hard drive, or burn them to a CD or DVD.
There are also online backup services that provide this service for a fee, and can be a convenient way to safeguard your records and other things of value to you.
Document Valuables
Another step you can take to prepare for disaster is to photograph or videotape the contents of your home or homes, especially items of higher value. The IRS has a disaster loss workbook, Publication 584, which can help you compile a room-by-room list of belongings, as do many insurance companies.
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.
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.
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. Recently, many Arkansas counties were declared as such, including White, Faulkner, Saline and Pulaski counties (but not Cleburne), meaning the due date for IRS tax filings and payments originally due on or after April 23rd to on or before June 30 have been extended until June 30.
This relief is available for individuals and businesses located in the affected counties, as well as those whose records needed to comply with deadlines or whose tax preparers are located in those counties. Note, however, as of this writing, the State of Arkansas has not announced similar extensions for State filings.
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.
