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Make storm tax plans now

By Kay Bell · Bankrate.com
Thursday, July 11, 2013
Posted: 5 pm ET

Tropical Storm Chantal has petered out, but the Atlantic hurricane season is still young. So now is the perfect time to think about safeguarding your financial records, particularly your tax information.

If you do suffer major storm damage, be it from a hurricane or tropical storm or the myriad other ways that Mother Nature chooses to whack us year-round, you might be able to take advantage of special tax filing options. The major move is to file an amended return that produces a tax refund you can use to help make repairs.

But to file that amended 1040 you'll need your original tax document. Here are five record keeping tips that can ensure your tax and financial documents stay safe in a disaster so you can use the information to recover after the storm has passed.

1. Back up your record electronically.

While it's not a bad idea to have a paper copy of your returns, electronic redundancy can be invaluable. Scan your papers, or if you file electronically, save a copy to your PC or laptop.

Then make a copy to an external hard drive, flash drive, CD or DVD and store it away from where you keep the originals. If you're a cloud-computing fan, you can put a copy there, too, but personally I prefer having a tangible storage device.

Electronic record keeping also is a good idea for tax receipts and other documents you use to fill out your returns. And don't forget about e-copies of bank and other financial statements, as well as insurance policies.

2. Document property, especially valuables.

Take pictures or videotape the contents of your home or place of business. Again, the photos can be printed snapshots or, as is usually the case nowadays, via your digital or smartphone camera. Again, it's a good idea to store copies of the photos in a safe place.

The photographs could help you prove the value of your lost items for insurance claims. They also are a good resource if you end up filing for a casualty loss tax deduction.

Internal Revenue Service Publication 584, Casualty, Disaster and Theft Loss Workbook, can help you determine your loss if a disaster strikes.

3. Update emergency plans.

Put together your "go bag," the collection of financial and personal items that you can easily grab and take with you if you have to evacuate at a moment's notice.

Also review your emergency plans every year. You may need to update them if your personal or business situation has changed.

4. Get copies of tax returns or transcripts.

If you don't have copies of your prior-year returns, get them before you need them. You can go to the IRS website and download Form 4506, Request for Copy of Tax Return. This will get you a copy of any lost or destroyed tax returns.

If you don't need the full return but just the basic information from it, such as your adjusted gross income and tax bill for the year, you can order a transcript online with that data.

5. Call the IRS.

Jot down this toll-free number, (866) 562-5227. That's the IRS' disaster hotline, created to help people with tax issues after a disaster.

Here's hoping that you never have to use any of these preparations. But don't take any chances. Get ready for full-force nature while things are calm.

***

Want the latest news on taxes, tax reform prospects, filing deadlines, political fights, Internal Revenue Service alerts and tax-saving tips? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."

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