IRS Reminds Taxpayers to Prepare for Natural Disasters
September is National Preparedness Month and with the peak of hurricane season just ahead, the Internal Revenue Service reminds taxpayers to develop an emergency preparedness plan or, if they already have one, to update it for 2023. Per the IRS, taxpayers can begin getting ready for a disaster with a preparedness plan that includes securing and duplicating essential documents, creating lists of property and knowing where to find information if needed. In the aftermath of a disaster, having the updated documents and other information readily available can help victims apply for the relief available from the IRS and other agencies. Disaster assistance and emergency relief may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. IRS recommends the following:
Secure key documents and make copies
- Taxpayers should keep critical original documents inside water- and fire-proof containers in a secure space. These include tax returns, birth certificates, social security cards, deeds, titles, insurance policies and other similarly important items.
- In addition, consider having a relative, friend or other trusted person keep duplicate copies of these documents at a location outside the potentially impacted disaster area.
- If original documents are available on paper, they should be scanned into a digital file format and stored in a secure digital location. This can provide added security and portability.
- Maintain a detailed inventory of the contents in your property and business. Taxpayers can take photos or videos to record their possessions and should also write down descriptions that include year and make and model numbers where appropriate.
- The IRS disaster loss workbooks can help compile lists of belongings or business equipment. After a disaster hits, this kind of documentation can help support claims for insurance or tax benefits.
- Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement.
- Most financial institutions can provide statements and documents electronically, an option that can aid the reconstruction process.
- Employers should check fiduciary bonds
- Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer against a possible provider default.
- Most employers already use the Electronic Federal Tax Payment System (EFTPS) to make their federal tax deposits and business tax payments. Because these payments can easily be made either by phone or online, EFTPS offers an especially convenient option when a disaster may displace businesses and their employees. It's also easy to track tax payments and receive email alerts through EFTPS.