Monday night we had a great speaker at Scouts from the Alpharetta Community Response team. She gave the boys a demonstration of what to carry in a family emergency pack. It got me to thinking about how we should prepare our records to survive a disaster (being the bean counter that I am). Here are some simple tips to make sure your financial records survive a disaster:
- Recordkeeping Take advantage of paperless recordkeeping for financial and tax records. Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format. You can copy them onto a ‘key’ or ‘jump drive’ periodically and then keep the electronic records in a safe place. We recommend using an online backup service such as Mozy or Carbonite (we use Carbonite) to automatically back up the contents of your home computers.
- Document Valuables The IRS has disaster loss workbooks for individuals that can help you compile a room-by-room list of your belongings. Similar workbooks are available from insurance companies and the American Red Cross. One option is to photograph or videotape the contents of your home, especially items of greater value. You should store the photos in a safe place away from the geographic area at risk. This will help you recall and prove the market value of items for insurance and casualty loss claims.
- Update Emergency Plans Emergency plans should be reviewed annually. Individual taxpayers should make sure they are saving documents everybody should keep including such things as W-2s, home closing statements and insurance records. Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches.
- Count on Your CPA In the event of a disaster, your CPA stands ready to help. We retain copies of all client returns both onsite and at remote backup. In addition, the IRS has valuable information you can request if your records are destroyed. If you have been impacted by a federally declared disaster, you may receive copies or transcripts of previously filed tax returns free of charge by submitting Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, clearly identified as a disaster related request.
For more information on preparing for disasters you can contact us at www.JohnsCreekCPA.com or 678.889.9548. Try the following links for more resources: