Get Prepared Before Disaster Strikes
Don’t Wait for the Storm: IRS Reminds Taxpayers to Prepare Now
While National Preparedness Month officially wrapped in September, the reminders from the IRS still stand strong this October. With hurricane season still active, winter storms on the way, and wildfire risks lingering, it’s a good time to double-check that your emergency plan is ready to go. Whether you’re managing a household or running a business, a few simple steps now can make recovery less stressful later.
Back Up the Basics
Start by securing your most important documents: past tax returns, Social Security cards, insurance policies, and property records. Store originals in a waterproof, fireproof container. It’s a good idea to keep digital copies, too. Also, share a backup with someone you trust outside your region.
Take Inventory
For both insurance and tax purposes, create a thorough record of your personal or business property. Photos and videos work well, especially when paired with descriptions that include make, model, and year. The IRS even has free disaster loss workbooks to help you stay organized, including one for individuals and one for businesses.
Lost Records? Help is Available
If the worst happens and your documents are destroyed, don’t panic. Most financial institutions can provide electronic versions, and the IRS offers help to reconstruct lost records.
For Employers
If you rely on a payroll service provider, confirm that they have a fiduciary bond in place. This adds an extra layer of protection if the provider can’t process your payroll due to a disaster.
Also, businesses can use the IRS’s Electronic Federal Tax Payment System (EFTPS) to make and track tax payments online. If you’re not signed up yet, visit EFTPS.gov.
When the IRS Steps In
If a federal disaster is declared, the IRS typically postpones tax filing and payment deadlines. These delays are automatic based on your IRS address of record. Relief workers or those with records tied to the disaster zone can call 866-562-5227 for help.
And remember: if you’re not insured, you may be able to deduct your disaster losses on your tax return for either the year of the loss or the prior year. Publication 547 has the details.
Resources You Can Use
- Ready.gov
- IRS Tax Relief in Disaster Situations
- DisasterAssistance.gov
- FEMA
- U.S. Small Business Administration Disaster Recovery
FAQs
Q: What records should I protect for tax purposes?
A: Tax returns, Social Security cards, property deeds, insurance policies, and bank records are a good place to start. Keep both physical and digital copies.
Q: How do I know if I qualify for IRS disaster relief?
A: Relief is typically automatic based on your IRS address of record in a federally declared disaster zone. Others affected can call the IRS disaster hotline at 866-562-5227.
Q: Can I deduct losses that insurance doesn’t cover?
A: Yes. Uninsured disaster losses may be deductible on the return for the year of the loss or the prior year. See IRS Publication 547 for how to report it.
