In recognition of National Wildfire Awareness Month and National Hurricane Preparedness Week, Reeder CPA Group emphasizes the importance of safeguarding your tax and financial documents. Disasters, whether natural or man-made, can strike with little warning, affecting not just immediate physical surroundings but also long-term financial stability. Preparedness is key to navigating these events with minimal disruption. Our checklist, aligned with recent IRS guidance, provides a guide to protecting essential documents, ensuring you can focus on your safety and recovery with peace of mind.

1. Secure Original Documents

• Store original documents like tax returns, Social Security cards, marriage certificates, birth certificates, and property deeds in a waterproof and fireproof safe.
• Place these documents in a location that is easily accessible in case of a quick evacuation.

2. Create Document Copies

• Make physical copies of all important documents.
• Store copies in a separate location, such as a safe deposit box, or with a trusted relative or friend who lives in a different geographic area.

3. Digital Copies and Backup

• Scan important documents.
• Store digital copies on a secure flash drive or use a secure cloud storage service.
• Ensure digital backups are encrypted and protected with strong passwords.

4. Record Valuables

• Use your smartphone to take photos or videos of valuable items in your home and business.
• Maintain a detailed list of these items, including descriptions and approximate values, to assist with insurance claims and tax deductions for losses.

5. Maintain a Disaster Loss Workbook

• Utilize the IRS’s Publication 584 and Publication 584-B to document personal and business property for potential disaster-related claims.

6. Plan for Record Reconstruction

• Familiarize yourself with the process of reconstructing records by visiting the IRS’s “Reconstructing Records After a Natural Disaster or Casualty Loss” webpage.
• Keep a list of important contact information for financial institutions, insurance agents, and tax professionals readily accessible.

7. Review Employer Responsibilities

• For business owners, ensure that any payroll service provider used by your business has an appropriate fiduciary bond.
• Verify the provider’s disaster readiness plan to ensure continuity of payroll processing.

8. Stay Informed About Tax Relief

• Monitor the IRS disaster relief page for updates on tax filing and payment extensions in the aftermath of a disaster.
• Know that the IRS automatically provides filing and payment relief to taxpayers in federally declared disaster areas.

9. Prepare to Contact the IRS

• Have the IRS disaster hotline number (866-562-5227) on hand to discuss disaster-related tax issues or to find out about disaster tax relief eligibility.

10. Regular Updates and Reviews

• Annually review and update your document storage and disaster preparedness plans.
• Consider changes in your financial situation, property ownership, or family status when updating your plans.

 Conclusion

At Reeder CPA Group, we understand the importance of preparedness for protecting your financial future. This checklist is part of our commitment to providing our clients with the tools and knowledge necessary to mitigate the impacts of unexpected disasters. By taking proactive steps to secure your important documents and valuables, you enhance your ability to recover and rebuild with confidence, knowing your critical financial information is safe. Remember, in the face of disaster, preparedness is your best defense.