Prepare for natural disasters by safeguarding tax records

With the start of hurricane season, the Internal Revenue Service encourages individuals and businesses to safeguard themselves against natural disasters by taking a few simple steps.Create a backup set of recordsYou should keep a backup set of records in a safe place. The backup should be stored away from the original set.Keeping a backup set of records –– for example, bank statements, tax returns, insurance policies, etc. –– is easier now that many financial institutions provide statements and documents electronically, and more financial information is available on the Internet. Even if the original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, you can download them to a backup storage device, like an external hard drive or burn them to a CD or DVD.Inventory your valuablesAnother step you can take to prepare for disaster is photograph or videotape the contents of your home, especially items of higher value. The IRS has a disaster loss workbook, Publication 584 that can help you compile a room-by-room list of belongings.A photographic record can help prove the market value of your items for insurance and casualty loss claims. You should store photos with a friend or family member who lives outside the area.Update emergency plans for personal and business situationsYou should review emergency plans annually. Personal and business situations change over time as do preparedness needs.If you own your own business, be sure to update your plans whenever you hire new employees or make changes to your business. Also be sure to inform your employees about these changes.If you use payroll service providers, ask the provider if it has a fiduciary bond in place. The bond could protect you in the event of default by the payroll service provider.