Preparing Tax and Financial Records for Natural Disasters

Be proactive with disaster preparedness

The Atlantic hurricane season officially starts on June 1 and forecasters are predicting an above average hurricane season for 2025. While you can’t control when or where a hurricane or other natural disaster takes place, you can take practical steps to protect important financial and tax records before a disaster occurs.

Your disaster preparedness plan should include safeguarding original and backup copies of important documents. Store originals in a secure, water and fireproof container. Copies of these documents should also be stored in a separate location, scanned and kept in an encrypted digital folder online, or on a secured computer in a second location.

Documents to safeguard include:

• Social security cards
• Marriage certificates
• Birth certificates
• Property ownership documents
• Passport information
• Password information
• Bank account numbers
• Vehicle identification numbers
• Insurance policies

Documenting other valuables

An inventory of all personal property in your home and/or business should always be kept up to date. You can simply take photos or videos of personal property and compile them into a list. This list with current photos or videos can support insurance claims and substantiate disaster losses for tax purposes.

However, it’s important to consider the risks associated with storing such information on electronic devices. These include potential security breaches and the loss of data if your device is misplaced or stolen. To ensure safekeeping, consider these options:

• Download and print the pictures, then store them securely.
• Save the inventory in an encrypted digital folder online or on a flash drive.

Finally, once your inventory is complete and safely stored, be sure to delete the images from your devices to further enhance security.

It’s easy to reconstruct records when you have a disaster plan that includes keeping original records and copies of important documents in a safe and secure place. For those who don’t implement a disaster plan- reconstructing records can be a daunting task.

Tax records

Anyone who needs tax return information can get free transcripts from the IRS. Copies of actual returns can be ordered by mail.

Real property records

You can obtain property tax statements with land and building values from the city or county assessor’s office and copies of deed and mortgage documents from the city or county recorder. For inherited property, check court records for the property’s probate value, and if a trust or estate existed, contact the attorney who handled the estate.

Vehicle records

Kelley’s Blue Book, National Automobile Dealers Association, and Edmunds are all reputable resources that will be able to determine the fair market value of a vehicle damaged in a disaster. For a recently purchased vehicle, contact the dealer for a copy of the purchase contract.

Personal property

The IRS highly recommends taking photos and videos of your property. If you don’t have current photos or videos of your property, you should:

• Draw a floor plan showing where furniture was placed- including the drawers, dressers, and shelves.
• Sketch a picture of the room looking towards shelves or tables and show their contents. These don’t have to be professionally done, just functional.
• Sketch shelves with any artwork, pictures, books, or memorabilia on them
• Don’t forget garages, attics, closets, basements, and items on walls.
• Use credit cards and bank statements to recall any recently purchased furniture or household items.

Business records

Business owners can obtain tax transcripts from the IRS. To recover other information:

• Request copies of invoices from suppliers to create lost inventories lists.
• Check security cameras, phones, and any other cameras for images and videos of buildings, equipment, and inventory.
• Review sales tax returns for gross sales for the return period.
• If you don’t have photos or videos, use the sketch method described above. For the inside of the building, make sure the sketch includes where equipment and inventory were located. For the outside of the building, be sure to map out where items such as shrubs, parking signs, and awnings are located.
• If the business was newly purchased, as the broker for a copy of the purchase agreement. The agreement should detail what property was acquired.
• For a newly constructed building, contact the contractor or local planning commission for building plans.

Payroll records and fiduciary bonds

Employers can retrieve payroll data, including Form 941 and records of tax payments, from their payroll service provider. Using a payroll service provider that has a fiduciary bond protects the employer if the payroll service provider defaults on its responsibility to file returns and make tax payments. If a payroll service provider isn’t being utilized, the state revenue department may have copies of filed employment and unemployment tax returns, as well as sales tax returns. Employees may also be able to provide copies of the W-2s if needed.

IRS disaster relief

When FEMA declares a major disaster, the IRS typically offers filing and payment relief to affected taxpayers. The relief is automatic for those who reside or have a business in counties affected by disaster. The IRS also provides helpful tools and resources to support individuals and businesses recovering from disasters.

The IRS provides numerous resources to assist individuals and businesses impacted by federally declared disasters. Access more information from the IRS on how to prepare.

Questions on disaster preparedness specific to you and your business? Contact your Keiter Opportunity Advisor.