With the approach of hurricane season, the IRS is urging taxpayers to take steps to protect their financial records. "Even if you don't live in an area prone to hurricanes, this is an excellent time to take a few minutes to help safeguard financial documents that can be hard to replace," said Kevin Brown, Commissioner of the IRS Small Business/Self-Employed Division. You can start by taking advantage of paperless recordkeeping. Many people can access their bank statements, credit card statements, utility statements and other financial documents via email. This method is a great way to protect your financial records from disaster. You can scan your W-2s, tax returns and other documents into electronic format. You can even scan your deductible receipts. You can then save all of your financial records to a key or CD. Put the CD in your safety deposit box or send it to a trusted relative. Make sure that you back up your files regularly and keep them in safe locations. In the case of a disaster, having a record of your belongings and valuables can help you prepare and prove an insurance claim. Go room by room listing all of your belongings. Back this up with photographs or videotape. "This will help you recall and prove the market value of items for insurance and casualty loss claims," said Tom Ochsenschlager with the American Institute of Certified Public Accountants. "Be sure to store the photos with a friend or family member who lives away from the geographical area." Have an emergency plan. Make sure that you have necessary documents kept safe. Keep you W-2s, tax receipts, home closing statements and insurance records close. Have the originals in a file that you can quickly grab if you need to leave in a hurry. Keep copies in a safe place. Losing your financial and tax records in a disaster can add a lot more stress to an already awful situation. Be prepared for the worst. |
