Disaster Preparedness for Taxpayers

August 17, 2021 by TxSEA
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With hurricane season in full swing, now is a good time to refresh yourself on some simple strategies that can help to protect you in the event of an emergency. The IRS has released this tax tip guide for disaster preparedness:

After a natural disaster, having access to personal financial, insurance, medical and other records can help people starting the recovery process quickly. There are a few things taxpayers can do to help protect their financial safety in a disaster situation.

Here are some financial preparedness tips.

  • Update emergency plans. A disaster can strike at any time. Personal and business situations are constantly evolving, so taxpayers should review their emergency plans annually.
  • Create electronic copies of documents. Taxpayers should keep documents in a safe place. This includes bank statements, tax returns and insurance policies. This is especially easy now since many financial institutions provide statements and documents electronically. If original documents are available only on paper, taxpayers can use a scanner and save them on a USB flash drive, CD or in the cloud.
  • Document valuables. Documenting valuables by taking pictures or videoing them before a disaster strikes makes it easier to claim insurance and tax benefits, if necessary. IRS.gov has a disaster loss workbook that can help taxpayers compile a room-by-room list of belongings.
  • Understand tax relief is available in disaster situations. Information on Disaster Assistance and Emergency Relief for Individuals and Businesses is available at IRS.gov. Taxpayers should also review the itemized deduction for casualty and theft losses. Net personal casualty and theft losses are deductible only to the extent they’re attributable to a federally declared disaster. Claims must include the FEMA code assigned to the disaster.

Taxpayers who live in a federally declared disaster, can visit Around the Nation on IRS.gov and click on their state to review the available disaster tax relief. Those who live in counties qualifying for disaster relief receive automatic filing and payment extensions for many currently due tax forms and don’t need to contact the agency to get relief.

 

Disaster Relief Resource Center for Tax Professionals

Disasters can mean that many payroll and practitioner businesses and their clients suffer significant losses. Our goal is to provide resources and help to the affected payroll and practitioner community.

This resource center addresses common questions from tax professionals.

For news releases and other announcements on recent disasters, see Tax Relief in Disaster Situations. Disaster relief applies to tax preparers who are unable to file returns or make payments on behalf of the client because of the disaster. Taxpayers outside of the disaster area may qualify for relief if:

  • their preparer is in the disaster area, and
  • the preparer is unable to file or pay on their behalf.

 

Disaster Assistance Information

 

Why Join TxSEA?

TxSEA is an organization that helps tax professionals reach their goals and find the resources they need for their clients. Joining our society makes it simple for enrolled agents in Texas to stay on top of earning the credits they need to maintain their licensing, as well as provides an opportunity for networking with other EAs in their local area. This can provide helpful information and leads to tax professionals licensed as enrolled agents today. Explore our site to learn more about the benefits of TxSEA for you and your clients.

 

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