How to safeguard your tax records

hat tip to xkcd.

The upcoming hurricane season may not be the only reason that you need to safeguard your tax records.  There are many good reasons for making sure that your tax records, as well as all of your other important papers, are safeguarded properly.

The last thing you want to worry about during a time like that is the IRS, so here are some steps for your peace of mind:

Create an electronic backup — The best way to safeguard your tax records is to have a backup, and nowadays, the best backup is an electronic backup.  Many banks, brokers, and certainly most CPA firms can provide you with your documents in electronic form (usually a .pdf).  Our office not only keeps all tax returns in secure electronic form, but also all of the source documents as well, so our clients are always covered.

If you have paper documents that you’d like to convert to electronic form, you should look into scanning them.  We use the Fujitsu ScanSnap S1500 here, and it is really very quick and easy to get paper documents into pdf form.

Once you have your important papers scanned, then you should save them to an external hard drive or use an online backup service.  You want to make sure that your external hard drive is in a separate location from the paperwork that you are backing up — you don’t want one disaster wiping out your originals and the backups too.

Document your valuables — This is one that everyone (myself included) knows that they need to do, but is tough to get done.  You should just take a few hours and go through your home and/or business and take pictures or video of everything that is important.  Actually, the IRS has a helpful little workbook for compiling a room-by-room list of your valuables.  Another thing that would help is a tip from a friend of mine who was in law enforcement.  He suggested that people keep a list of the serial numbers of all of their valuable things — TVs, computers, even lawn mowers — then that would immensely help the police track down your items in case of theft.  Think about it — could you specifically describe how your lawn mower was different than anyone else’s to the police in case it was stolen?  Neither could I!

After the fact — get a copy of your return: Did you know that you can request copies of previously filed tax returns?  Here at Loggins & Associates, we can request copies of tax returns instantly online, but if you’d like to do it yourself, take a look here.


For more information, check out this helpful IRS video or IRS podcast on preparing for disasters.

If you have other tips to share, please feel free to do so in the comments below!


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