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The IRS recently published a newswire urging people 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 protect tax & financial documents that can be hard to replace.” (Newswire dated June 1, 2007)

Actually whether or not you live in a hurricane area, there’re many things that can happen to destroy important records. Right. We all think about big natural disasters such as hurricanes, tornadoes, earthquakes, etc. But there’re other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc.

If you happen to get audited, the IRS does not particularly care why you no longer have your records & they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, & how much mortgage interest you paid to a financial institution. They do not have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc.

There are many ways you can select to keep your records safe.

1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, & other documents can easily 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 safety deposit box and/or sent to a relative in another city.

2. CD or DVD: Records can be scanned into the computer & burned onto a CD or DVD. Several copies can be made inexpensively & stored in many places.

3. Record Keeping Companies: There’re companies that will copy & keep your records in their vaults so that in the case of a disaster they can provide you with a copy.

4. Protective Boxes & Safes: You can purchase fire proof & water proof boxes & small safes to keep valuable records in. They can work well if you do not live in a place were place where a natural disaster will likely take down the entire house.

Other items you may want to document & keep safe are personal records such as birth certificates, social security cards, passports, insurance documents, home closing documents, & investment documents. In large disasters, it’s important to be easily able to prove who you’re & that your children belong to you… If your home is destroyed you may need to prove ownership.

There once was a family of eight. One evening the whole family went to the local pool for an evening of swimming & fun. They were gone about two hours & when they arrived home, their home was on fire. The fire department was there & the neighbors had all been frantically trying to find them. The plug on their toaster had shorted out & started the fire. It was a small fire that was rapidly contained, but the fire department would not let the family go in until they were sure everything was safe, which took a day. They stood there with nothing but their swimsuits & towels as neighbors ran to their homes to find clothing & diapers so the family could at least get dressed.

When they were finally able to enter their home, the smoke had damaged everything. Do you follow? They spent a week in a hotel until the insurance could make arrangements to find temporary housing, Then came the task of listing all the things that had been destroyed & working with the insurance company to fix their home & replace the contents.

This was a relatively small disaster as disasters go. But it could happen to anyone. In any disaster it’s good to have a record 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 insurance claim after a disaster.

Also, if you do not have insurance to cover losses, they can be deducted on your tax returns. Recording what you have, when you purchased it & what you paid for it can also expedite claims. There is more. The IRS has a free disaster loss workbook that can assist individual persons & businesses compile a detailed list of belongings. There is more. The IRS publication 584 is for individual persons & the publication 584B is for businesses.

Nothing can take away the pain & trauma of a disaster, but being prepared can make the recovery process much easier. Review your emergency plan annually. Make sure records that have been safeguarded are current & up to date. Being prepared takes much of the worry out of life.

Christopher Anderson wants to share his success as a business owner with others who desire to own their own business. He also believes that the economy is stronger with more business owners, & as a result, He is focused on helping business owners succeed. http://www.lonepeakbusiness.com

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