Class for Tax Preparation: Preparing for Disasters: Essential Tax and Financial Tips from the IRS

As disaster season approaches, the IRS is reminding taxpayers that National Wildfire Awareness Month in May and National Hurricane Preparedness Week (May 4-10) are perfect opportunities to get a jump start on disaster preparation. With tax season behind us, now is an ideal time to think about safeguarding your important financial and tax documents before the peak of disaster season hits.

Natural disasters can strike without warning, and the impact on individuals, businesses, and organizations can be devastating. Preparing for these events year-round is key, and using the observance of Wildfire Awareness Month and Hurricane Preparedness Week as a reminder to assess your readiness is a smart strategy.

So far this year, the Federal Emergency Management Agency (FEMA) has declared 12 major disasters across nine states, including severe winter storms, flooding, tornadoes, wildfires, and landslides. Keeping an eye on these events is crucial, and for up-to-date disaster declarations and related information, visit FEMA’s Current Disasters page.

Here are some IRS tips to help you protect your personal financial and tax information in case disaster strikes:

Protect original documents like your tax returns, Social Security card, marriage certificate, birth certificate, and property records by storing them in a waterproof container in a secure location. Make copies of these documents and store them in a secondary, safe place such as a safe deposit box or with a trusted person in another area. For additional convenience, you can scan these documents and store them on a flash drive for easy access and portability.

• Take photos or videos of high-value items using your mobile device. Having a current visual record will make it easier to file insurance claims or claim tax benefits after a disaster. The IRS offers two workbooks, Publication 584 (for personal-use property) and Publication 584-B (for business property), which can help you create an inventory of your belongings or business equipment.

• In the aftermath of a disaster, you may need to reconstruct lost records for tax purposes, insurance claims, or federal assistance. The more accurately you can estimate your losses, the more likely you’ll be to qualify for loans or grants. Visit the IRS's Reconstructing Records webpage to learn more about how to begin the process.

• If you're an employer, check whether your payroll service provider has a fiduciary bond in place. This bond protects your business in the event the payroll service defaults. The IRS encourages employers to carefully choose their payroll service providers to avoid future complications, particularly during a disaster.

• When FEMA issues a disaster or emergency declaration, the IRS may grant filing and payment deadline extensions to those affected. Taxpayers in the impacted areas will automatically receive relief, but they don’t need to call to request it. For a full list of affected states and counties, visit the IRS Disaster Relief page.

• If you're in a covered disaster area but haven’t received relief or if you're outside the designated area but were still affected by a disaster, you can contact the IRS Disaster Hotline at 866-562-5227. IRS specialists trained in disaster-related issues can help answer your questions and guide you through the relief process.

  
  

Natural disasters are unpredictable, but being prepared can help minimize their financial impact. Use this time, during Wildfire Awareness Month and Hurricane Preparedness Week, to create or update your disaster readiness plan. With these IRS tips, you can ensure your important documents and financial information are safe and secure—giving you peace of mind when disaster strikes.