September is National Preparedness Month. The Internal Revenue Service urges everyone to create an emergency preparedness plan, or if they already have one, to update it for 2022, given the impending peak of hurricane season and the ongoing threat of wildfires in many areas.
Everyone, from individuals to organizations and companies, can begin immediately by
- Securing and duplicating essential tax and financial documents.
- Creating lists of property.
- Knowing where to find information once a disaster occurs.
begin securely
Important original documents should be kept by taxpayers in waterproof containers in a safe location. These include birth certificates, insurance policies, deeds, titles, and other documents with a similar level of importance. Additionally, think about having a relative, friend, or other trustworthy individual keep backup copies of these documents at a location away from any potential disaster zones.
Generate copies
Try scanning original documents into a digital file format if they are only available in paper form. Additional security and portability may be available by storing them in a safe digital location, such as a cloud-based storage program.
Records of value
Keep a thorough inventory of your possessions and inventory for your business. Taxpayers can record their possessions using photos or videos, but they should also list descriptions that, when applicable, include the year, make, and model numbers. This kind of documentation can be used to support insurance or tax benefit claims after a disaster. Individuals and businesses can compile lists of their possessions or business equipment using the IRS disaster-loss workbooks.
bonds owed by employers
Employers who use payroll service providers should verify that the provider is covered by a fiduciary bond to safeguard the employer in the event of a provider default.
For their business tax payments and federal tax deposits, the majority of employers already use the Electronic Federal Tax Payment System (EFTPS). EFTPS offers a particularly practical choice when a disaster may uproot many businesses and their staff because these payments can be made easily by phone or online. Through EFTPS, it is simple to monitor tax payments and get email notifications. Any company can open an EFTPS account if it doesn’t already have one.
Decide where to go
Following a disaster, records may need to be rebuilt in order to file taxes, qualify for federal aid, or receive insurance reimbursement. Most financial institutions offer the option of electronically delivering statements and documents, which can help with the reconstruction process. Visit the IRS’s Reconstructing Records page for advice on document reconstruction.
must read: The IRS Is Giving Surprise Refunds to 1.6 Million Taxpayers
IRS is prepared to assist
The IRS may extend certain deadlines for filing and paying taxes after a federal disaster declaration or offer other relief. Visit the IRS Tax Relief in Disaster Situations webpage or Around the Nation on IRS.gov for a list of communities that qualify for assistance and information on the types of assistance offered.
Taxpayers who are situated in the designated disaster area are automatically granted filing and payment relief by the IRS. This indicates that in order to receive disaster tax relief, taxpayers whose IRS address of record is situated in the disaster area do not need to get in touch with the IRS.
Numerous taxpaying citizens who reside outside the disaster zone may also be eligible for assistance. It also applies to taxpayers whose records are in the disaster area and are required to be filed or paid by the deadline but were postponed during the relief effort. The IRS disaster hotline can be reached at 866-562-5227 to make a request for assistance from qualified people and organisations outside the disaster area.
The option to deduct uninsured or unreimbursed disaster losses on either the tax return for the year the disaster occurred or the return for the year prior is also provided by a special rule, which is available to both individuals and businesses. Consult Publication 547, Casualties, Disasters, and Thefts, for more details.
