3 Tips for Safeguarding
Your Business & Personal Tax Records
the Atlantic hurricane season will be over in a month or so I
(and the IRS) want to encourage individuals and businesses to
safeguard their tax records against
natural disasters as well as common accidents, by
taking a few simple steps.
Here are 3 tips to help you prepare in case an accident or
1) Backup Your Records Electronically
You should keep a set of backup records in a safe place
away from the original set. Keeping a backup set of records,
bank statements, tax returns, insurance policies, etc is
easier now that many financial institutions provide statements
and documents electronically.
Even if the original record is only available on paper, it can
be scanned into an electronic format. With documents in
electronic form, taxpayers can download them to a portable
backup storage device such as an external hard drive, CD or
DVD that you can take with you in the event that you need to
2) Document Your Valuables
Taxpayers should photograph or videotape the contents
of their home, especially items of higher value. A
photographic record can help an individual prove the market
value of items for insurance and casualty loss claims. Photos
should be stored at an outside location.
To document your valuables, the IRS has a disaster loss
workbook, Publication 584, Casualty, Disaster and Theft Loss
Workbook, which can help taxpayers compile a room-by-room list
3) Update Your Emergency Plans
Emergency plans should be reviewed at least once a year.
Personal and business situations change over time as do
preparedness needs. When employers hire new employees or when
a company changes functions, plans should be updated and
employees should be informed.
NOTE: If we are doing
your taxes we have copies of your return but not copies of all
your support documentation like physical receipts, bills,
invoices and so on. If you scan documents a simple
strategy is to copy or burn them to a flash drive or CD/DVD
and store it offsite in a safe deposit box, storage unit or
give it to a trusted family member or relative who doesn't
live with you. Online backup services like Carbonite
will also work for electronic files. Either way that 2nd
or backup copy will come in handy if you ever need it.
(taken from IRS Special Edition
Tax Tip 2012-10)
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W. Edward Newton Jr.,
Certified Public Accountant