Planning for a Disaster or Emergency
Spring is a time of renewal and preparation – spring cleaning, turning over garden beds, and swapping winter coats for summer shorts. But there are other essential things to prepare for in areas of the country where tornadoes, fires, and other natural disasters can impact the community.
According to the National Weather Service the most common months for tornadoes are May, April and June. But, despite the spring season being the most common season for Oklahoma tornadoes, 2021 set a record for the most tornadoes in the fall season with a whopping 38!
When a disaster strikes, businesses are often overwhelmed by the work needed to rebuild, recover and meet financial obligations. That’s why it’s important to prepare for potential disasters by safeguarding your tax and financial records and familiarizing yourself with the resources and tax provisions that are provided by the IRS.
Emergency Tax Relief Disaster Locations
There are special tax law provisions to help taxpayers and businesses recover financially, especially if the federal government declares your location to be a disaster area. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Additionally, both individuals and businesses can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return.
The Disaster Assistance and Emergency Relief for Individuals and Businesses page on IRS.gov provide answers to frequently asked questions, the latest tax relief guidance for disaster situations, and news specific to local areas, primarily disaster relief or tax provisions that affect certain states. Additionally, IRS Publication 3067: IRS Disaster Assistance – Federally Declared Disaster Area provides information to individuals and businesses affected by a federally declared disaster and the assistance available to disaster victims.
Disaster Planning
Whether you live in an area frequently impacted by disasters or not, being prepared for an event that could cause damage to your home, your personal property and important documents is critical. One of the most important things you can do for yourself and your business is to safeguard your financial records. There are simple steps to help people and businesses protect financial and tax records in case of disasters, including:
Using paperless recordkeeping for financial and tax records
Keeping electronic files is the best way to protect your important financial documents. Some documents like bank statements can be received electronically and other paper documents like W-2s and returns can be scanned into a digital file.
Always be sure to back up all of your electronic files and store them in a secure location. Making duplicates and keeping them in a separate location is a good business practice.
Documenting valuables and business equipment
Keeping a detailed, room-by-room list of your belongings and business equipment is essential to recalling and proving the market value of items for insurance and casualty claims. Documenting the contents of your home by photograph or video is a particularly effective option. Consider storing the photos or videos with a friend or family member who lives away from the geographic area at risk.
Creating or updating continuity of operations plans for businesses
The time to plan for a disaster is before one strikes. Start planning now to improve the chances that your business will recover. The following preparedness strategies are common to all disasters:
- Get informed about hazards and emergencies and learn what to do for specific hazards.
- Develop an emergency plan.
- Learn where to seek shelter from all types of hazards.
- Back up your computer data systems regularly.
- Decide how you will communicate with employees, customers and others.
- Use cell phones, walkie-talkies, or other devices that do not rely on electricity as a backup to your telecommunications system.
- Collect and assemble a disaster supplies kit. Include a portable generator.
- Identify the community warning systems and evacuation routes.
- Include required information from community and school plans.
- Practice and maintain your plan.
Updating emergency plans
Once you’ve developed a plan, make sure you check it regularly – at least every year – so your preparedness needs can be updated if necessary. Taxpayers should make sure they are saving important documents like W-2s, home closing statements, and insurance records. Businesses with new employees should update their plans accordingly and inform new employees of changes.
No matter the season, Team NextGen is always here to help you. Call or click here to schedule an appointment with one of our tax professionals at any time.