Tax News: Natural Disaster Preparation and Taxes

The Internal Revenue Service ("IRS") issued a reminder to taxpayers advising on the creation or maintaining of an emergency preparedness plan. A well-thought-out plan is a critical component for surviving natural disasters. Taxpayers, whether individuals, organizations or businesses, should take time now to create or update their emergency plans. 

A solid plan includes securing and duplicating essential documents, creating lists of property and knowing where to find information once a disaster has occurred. Some useful suggestions to ensure your tax documents are secure are as follows: 

1. Secure key documents and make copies
   1. Taxpayers should place original documents such as tax returns, birth certificates, deeds, titles and insurance policies inside waterproof containers in a secure space. Duplicates of these documents should be kept with a trusted person outside the area of the taxpayer. Scanning them for backup storage on electronic media such as a flash drive is another option that provides security and portability.
2. Document valuables and equipment
   1. Current photos or videos of a home or business’s contents can help support claims for insurance or tax benefits after a disaster. All property, especially expensive and high value items, should be recorded.
3. Employers should check fiduciary bonds
   1. 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.
4. Rebuilding documents
   1. Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement.

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If you or a loved one has been impacted by a natural disaster, please contact the Tax Attorneys at Fazzio Law, we are in your corner!

Full announcement link: https://www.irs.gov/newsroom/as-peak-hurricane-season-nears-irs-reminds-people-to-prepare-for-natural-disasters