How to secure your financial and tax records in case of disasters?

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Tax-Disaster-Recovery

Have you ever thought about the odds of a disaster dismantling all your financial and tax records including your insurance and fiduciary bonds? Imagine all your bills, tax returns and important business documents being washed away by a flood or a cyclone or an earthquake? Even if it does, we are here to ensure you take preventive measures to put to safety all your essential records that would help you in the aftermath of such disasters.

Indulge in the habit of keeping paperless records

A great way to safeguard your financial and tax records is by maintaining a paperless copy of them. Many people receive documents like their bank statements and important tax records like the Form W2-s tax returns over email, which is a great way to keep the information safe from unexpected disasters. In fact the IRS too advocates taxpayers to use the digital mode of storage as much as possible to safeguard all valuable tax documents.

Even if you have such documents over mail, or in paper, you should inculcate a habit to download/ scan such records and keep them safe over the cloud. Ensuring that you password-protect these documents before uploading them is essential and will increase the safety of your confidential data.

Uploading such documents over the cloud is one way. Being more precautious is another. Don’t forget to make backups and keep them at different places. You can put them on a CD or DVD or use the services of those retail stores that sell software packages for recordkeeping.

A point to keep in mind is, sharing the password of the protected documents with your trusted ones to be safe and maintaining records of such data at different places. The thought for them to be readily accessible to you may not be a good idea because no one can foresee where such calamities hit, and if they hit the nearby areas, then you might end up losing your data forever.

Did you know that there is something called as a disaster loss workbook?

There exists disaster loss workbooks for individuals and businesses. Such workbooks will help you compile a room-by-room record of your belongings at your home and your office. This can be done by taking photographs and videos of things valuable to you and keeping them in the records of the IRS and someone reliable who stays away from the area where you are put up. By staying away, we mean places which would less likely be hit by the same calamity at the same time.

By doing so, you can keep a record of the market value of your belongings, which will help you claim the right value from insurance agencies and make good of the losses caused to you.

You can refer to the publication 584 or 584-B to know more in this regard or contact us to fill you in about all such safety hacks to keep yourself disaster-ready.

A great piece of advice: Make a disaster survival plan for your business

Yes, you read it right. Just like you make a business plan, the same shall be your approach to make a disaster plan. Suppose, a disaster hits your business, how soon can you imagine it to be back on its feet? So, make a disaster plan and increase the chances of your business for survival and recovery. Ensure that you maintain a digital copy of all your tax records and financials and save them at different locations just like discussed above. The aftermath of a disaster will not protect you from your tax liabilities, and you don’t want to lose out on your records for filing exemptions and returns to get tax breaks. The money saved while filing for tax returns can enable you to invest it in your business for its speedy recovery. So, be conscious, aware and take timely decisions to keep your business safe and tax ready.

You can request a copy of your return by following these simple steps

You can request a copy of your tax return along with all attachments including the Form W-2 by using the Form 4506. This form can enable you to receive all the information about your tax returns and liabilities and will help you take tax relief for such disasters.

Just like effective tax planning can decrease your tax liabilities and help you claim exemptions; similarly disaster planning can keep these records safe and help you get back on your feet quickly.

For more such tax news and updates, stay tuned with MyTaxFiler. We also provide a one-stop solution for all your tax-related woes. Simply drop a mail at tax@mytaxfiler.com or call us at (888)-482–0279 for an on-call consultation.

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