Before a natural disaster strikes, taxpayers are encourage to prepare if possible. This includes putting financial safety measures in place.
To help protect your financial safety in a disaster situation, taxpayers should:
- Update emergency plans– Strive to make this a yearly review
- Create electronic copies of documents– Taxpayers should keep this information in a safe place. This includes bank statements, tax returns and insurance policies. If original documents are available only on paper, taxpayers can use a scanner and save them on USB flash drive, CD or in the cloud.
- Document valuables– Taxpayers can document valuables by photographing or videotaping them before a disaster strikes making it easier to claim insurance and tax benefits, if necessary.
- Know what tax relief is available in disaster situations– 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.