Keeping Your Tax Records Safe from a Disaster

In the event of a disaster, the last thing you may be concerned about is your tax records. However, once the dust settles, perhaps literally if not metaphorically speaking, if you have safeguarded your tax and financial records, that will be one last nuisance to concern yourself with.

Here are some tips that will ensure your important records remain secure.

Take advantage of paperless options for recordkeeping

If you are not already taking advantage of green options like electronic bill paying and electronic submission of bank statements, now is the time to start. In addition to the convenience, storing important documents on your computer prevents valuable paper docs from being permanently lost.

Make sure your system has adequate back up storage. Either take advantage of software products for back up or copy essential files to a CD. Guard your computer system from lightning with a surge protector.

Document business assets and valuables

If you have ever had to give a room by room estimate of your losses to an insurance adjustor, surprisingly, it's not easy to do. Things we value and use every day seem to get misplaced in our mind as we try to recall each item lost and its value.

The IRS makes two workbooks available, free of charge, in order to keep track of business and personal items. Use Publication 584, Casualty, Disaster, and Theft Loss Workbook and Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook to help you compile a room-by-room list of your belongings or business equipment.

Another excellent way to document valuables is to photograph or videotape items.

Rebuild your tax records

In preparing for a disaster, you may find that you are missing certain tax documents or even tax returns. The IRS can provide you with a copy of your tax records. In some cases, they will do this free of charge, especially if you lost your returns in a fire, flood or other disaster.

Use Form 4506, Request for Copy of Tax Return, to request a copy of your tax return and all related documents, including W-2s, 1099s and all related schedules. Generally, there is a $57 charge for the IRS to pull your documents from archive, photocopy and mail the package out.

If you only need information off of the return, in lieu of the return itself, use Form 4506-T, Request for Transcript of Tax Return. The 4506-T is most often used to request income information needed for applications for student loans and mortgages.

If you had your tax return completed by a paid preparer, they should be able to provide you a copy of the return as well.

For more information from the IRS specific to recent disasters, see the Tax Relief in Disaster Situations page at irs.gov.

More from this Contributor:

IRS recordkeeping tips

IRS offers relief to those affected by disasters

10 things unemployed taxpayers need to know