Sunday, July 12, 2009

Tax Planning Tips For The Hurricane Season

With the 2009 hurricane season underway, there are several steps you can take in order to protect yourself against loss.

  • Create An Electronic Backup of All Important Documents

Each household should keep an electronic set of backup records in a safe place. Your backup records should include bank statements, tax returns, insurance policies etc. It is very easy to keep your records in an electronic format since many financial institutions provide statements and documents electronically, and much more financial information is available on the Internet. Even if the original records are provided only on paper, such as passports and birth cer, they can be scanned into an electronic format using any flatbed scanner or multifunctional printer that contains a scanner. With documents in electronic form, you can save them onto a backup storage device, like a portable hard drive which comes in capacities of 250gb to 750gb, or a usb flash drive which can hold up to 32gb of data. I recommend also burning a copy of your data onto a DVD (CD if you do not have a DVD burner) as a backup to your electronic backup, because we know what could happen to our electronic devices if they get wet. Whatever backup device you choose, the data should be kept current and be stored away from the original set in a special emergency bag that should be already packed in case you have to leave in a hurry.

  • Document Valuables

Another step you can take to prepare for disaster is to photograph or videotape the contents of your home, especially items of higher value. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.
It is important that you keep a photographic record of your belongings in order to establish market value of items for insurance and casualty loss claims. Hard copies of your photos should be stored with a friend or family member who lives outside the area. These photos should also be stored electronically with your other documents and you should have a copy burned to a DVD.

  • Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

  • Check On Fiduary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

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