The Irs recently published a newswire urging citizen to safeguard their records. Irs Acting Commissioner, Kevin M. Brown stated, "With forecasts calling for an active Atlantic hurricane season, the Irs encourages taxpayers to safe tax and financial documents that can be hard to replace." (Newswire dated June 1, 2007)
Actually either or not you live in a hurricane area, there are many things that can happen to destroy prominent records. We all think about big natural disasters such as hurricanes, tornadoes, earthquakes, etc. But there are other disasters that can affect whatever no matter where you live. They comprise such things as fires, flooded basements, theft, accidentally throwing things away, etc.
If you happen to get audited, the Irs doesn't particularly care why you no longer have your records and they will go off the records they can gather. The Irs can contribute you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government pupil loans, and how much mortgage interest you paid to a financial institution. They don't have records of company deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.
There are several ways you can choose to keep your records safe.
1. Paperless narrative keeping: With the wide use of Computers, internet bank records, W-2 forms, and other documents can literally be downloaded to your Computer. Other documents can be scanned in. This can then be saved onto a Usb drive as a back up which can be store in a security deposit box and/or sent to a relative in an additional one city.
2. Cd or Dvd: Records can be scanned into the computer and burned onto a Cd or Dvd. several copies can be made inexpensively and stored in several places.
3. narrative retention Companies: There are fellowships that will copy and keep your records in their vaults so that in the Case of a disaster they can contribute you with a copy.
4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep significant records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the whole house.
Other items you may want to document and keep safe are personal records such as birth certificates, communal security cards, passports, assurance documents, home closing documents, and speculation documents. In large disasters, it is prominent to be able to prove who you are and that your children belong to you. If your home is destroyed you may need to prove ownership.
There once was a house of eight. One evening the whole house went to the local pool for an evening of swimming and fun. They were gone about two hours and when they arrived home, their home was on fire. The fire division was there and the neighbors had all been frantically trying to find them. The plug on their toaster had shorted out and started the fire. It was a small fire that was quickly contained, but the fire division wouldn't let the house go in until they were sure all things was safe, which took a day. They stood there with nothing but their swimsuits and towels as neighbors ran to their homes to find clothing and diapers so the house could at least get dressed.
When they were finally able to enter their home, the smoke had damaged everything. They spent a week in a hotel until the assurance could make arrangements to find temporary housing, Then came the task of listing all the things that had been destroyed and working with the assurance company to fix their home and replace the contents.
This was a relatively small disaster as disasters go. But it could happen to anyone. In any disaster it is good to have a narrative of your personal belongings, especially items of greater value. Photographing or video taping the contents of your home can be a great help when filing an assurance claim after a disaster.
Also, if you do not have assurance to cover losses, they can be deducted on your tax returns. Recording what you have, when you purchased it and what you paid for it can also expedite claims. The Irs has a free disaster loss workbook that can help individuals and businesses compile a detailed list of belongings. The Irs publication 584 is for individuals and the publication 584B is for businesses.
Nothing can take away the pain and trauma of a disaster, but being ready can make the salvage process much easier. Characterize your urgency plan annually. Make sure records that have been safeguarded are current and up to date. Being ready takes much of the worry out of life.
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