Safeguarding Records: Protect All Documents
Did you ever think about how to recover once a natural disaster strikes? Have you thought about what kinds of documents would be beneficial to have safeguarded for emergencies? Whether you may live in an area susceptible to tornadoes, hurricanes, earthquakes or hazardous fires you will want to have important documents protected.
What kinds of documents would this pertain to?
The IRS would like for all taxpayers to keep returns forever, but a good number to follow would be for seven years. These documents should be kept in two forms and in different safe keeping storage places. Your paper returns should be kept in a file and easily accessible. Transfer your paper returns to an electronic storage device as your second copy. Returns can be scanned and saved onto an electronic storage device, CD, DVD, or flash drive. Keep them available to grab if you need to leave in an emergency, or better yet have copies stored outside of your home. If you have made electronic copies, they are small enough to fit in a bank safety deposit box or purchase a small lock box you can store in a family member’s home.
Bank records are easily stored electronically. If you do not use online banking, you can scan paper copies and save them. Online banking provides statements which are easily stored.
Insurance policies are important enough to scan and make copies as well. Any legal documentation which you would need in the aftermath of a disaster would be beneficial to backup and store separately. When your home has been destroyed, you will want to make your claims as soon as possible. Making claims with insurance companies takes time and if you have everything ready in a safe place, your recovery time will be lessened.
You will want to take pictures or videotape items throughout your home and keep them in two different places as well. Thanks to digital cameras and video equipment, keeping this type of documentation stored electronically is a breeze. If your home is destroyed, you will want visual proof of the items for insurance and casualty loss claims. The market value of the items will be more easily proved with the photographic record.
When you set out to document everything and get it electronically backed up, it will be a bit of a time investment. Updating will be simple. Having easy access to the items as you leave your home during an emergency needs to be part of a well set plan. Review emergency plans with your family a few times a year, more often if you have young children. Your place of business should review yearly and update with any changes. Since you may not be at home when a natural disaster strikes, it is a good strategy to have copies of these items located elsewhere.
Take the time now to save the important documents now so when a disaster happens or an IRS audit presents itself, you will have everything ready to process. You will thank yourself for being prepared ahead of time.