A natural disaster—like a winter storm, flood or fire—can turn your life upside down. Property may be damaged, tax records destroyed and other valuable items and documents lost, most likely forever.
Alert: The IRS recently posted timely advice for protecting your personal effects. (IRS Special Edition Tax Tip 2014-15, 6/5/14) Essentially, it cautions taxpayers to be prepared for the worst.
1. Back up records electronically. Many people already have arranged to receive bank statements by email. You can also scan tax records and insurance policies onto an electronic format. Use an external hard drive, CD or DVD to store important records. Also, be sure you back up your files and keep them in a safe place.
2. Document valuables. Take photos or videos of the contents of your home or business. These visual records can help you prove the value of your lost items. They may help with insurance claims or casualty loss deductions on your tax return. You should store them with a friend or relative who lives out of the area.
3. Update emergency plans. Review your emergency plans every year. Update them when your situation changes. Make sure you have a way to get severe weather information. Have a plan for what you will do if threatening weather approaches.
4. Obtain copies of tax returns or transcripts. Go to www.irs.gov to print out Form 4506, Request for Copy of Tax Return, to replace lost or destroyed tax returns. If you just need information from your return, you can order a free transcript online or by calling (800) 908-9946. You can also file Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, or Form 4506-T, Request for Transcript of Tax Return.
5. Rely on the IRS. If you fall victim to a disaster, the IRS says you should take comfort in knowing that it is standing by, ready to help. You can call the IRS disaster hotline at (866) 562-5227 for special help with disaster-related tax issues.
Online resource: For more information, visit the IRS' "Disaster Relief" page.
- Small Business Tax Deduction Strategies No matches