5 Ways to Hurricane Proof Your Tax Records

Hurricanes, tornadoes, floods, earthquakes — natural disasters strike without warning. Just like any other risk, individuals and businesses should take reasonable measures to safeguard against them, because in the middle of a natural emergency the last thing you'll want to deal with is an emergency audit.

1. Store copies in a different location

What are the chances of lightning striking the same person twice?

Not high? How about 3 times? 4 times?

It's basic probability. The likelihood of disaster striking twice is low enough that the chance of the same disaster repeating itself becomes exponentially lower. Unlikely things tend to not happen more than once.

2. Make electronic copies

Storing electronic copies offers a convenient alternative to creating hardcopies. Significantly less storage space is required, since it's obviously much easier to fit a CD or a flash drive into a safety deposit box than it is to fit a pile of paperwork. As a result, scanning physical copies or generating records is primarily intended for electronic storage.

3. Back-up your records to the cloud

Before you start shipping your CDs cross country, consider backing up your electronic copies on servers as a more cost-effective method. Electronic storage will open a world of organizational tools to you that will save you time and money when compared to traditional hardcopies.

You'll be able to create multiple backups in multiple locations across the country. When done properly, it becomes a foolproof method of safeguarding your records against any natural disaster. However, once electronic copies have been made, you'll need to take additional precautions against other threats.

Make sure your files are protected against identity theft and cyber-attacks. If you go this route, you should research your host provider to ensure your service is safe and secure.

4. Create visual record of valuables

Your tax records refer to physical property. If that physical property is destroyed in a disaster, it can become difficult to prove it existed. Providing photographic or video evidence solves this problem. It doesn't matter how you choose to store these documents, as long as they're kept separate from your existing property.

The IRS has guidelines for how to prepare your documents in a way accurately protects your market value and prepares you for filing casualty loss claims.

5. Ask the IRS for help

The IRS can audit tax records dating as far back as six years, which is why you should keep at least six years records at a time. However, when it comes to natural disasters, they are willing to help. You can call an IRS specialist to request disaster-related assistance at 1-866-562-5227.

Have questions about safeguarding your records or other tax issues? We can help!
(631) 921-6894