As hurricane season approaches, it is a good reminder to review the procedures in place that safeguard your tax records. Unfortunately more often then not this advice tends to get ignored. Now more then ever it is incredibly easy to safeguard tax records thanks to how much technology has advanced. What makes it so easy to safeguard tax records now is the fact that everything can be done digitally, so there is no longer the need to have physical copies of documents. Electronic backups are much easier to track and organize. USB flash drives, portable hard drives, and web-based document management systems are a great way of storing electronic documents, such as insurance statements, bank records, and tax returns.
Along with electronically storing your documents you should retain some type of photographic or video evidence of anything in your home, most notably anything that is particularly valuable. Again, this is something that tends to get dismissed by people, but if there’s ever something like flood damage or a fire where the majority of a house’s contents are going to get damaged having proper documentation is a huge deal and will greatly help to speed up and guarantee that any insurance claims will not get dismissed. Digital pictures and videos can be easily stored electronically along with any important documents, meaning in the case of an emergency you can just grab one flash drive or portable hard drive and not have to worry about dashing into an office and grabbing a bunch of different folders and physical copies of documents.
Updating emergency plans is another simple thing that gets overlooked in the business world. At least once a year it is worth taking the time to go over any emergency plans for employees. Any new employees should always be advised when they start their jobs. Any big company changes are worth addressing as well.
If there is ever a disaster and you are affected, you can request previously filed tax returns by filing Form 4506, Request for Copy of Tax Return. Taxpayers can also request tax transcripts online from the IRS Website. There is no reason not to safeguard tax records in this digital age, and the last thing that you want to happen is for a disaster to become even more devastating, especially when there are so many simple options to protect your most important information. For further assistance and advice on safeguarding your important documents please contact the CLloyd Group.