Safeguarding Your Records at Home

Family documents are at peril in the event of a disaster

Internal Revenue Service

A natural disaster can occur with little advance warning, putting family records at peril. The Internal Revenue Service encourages taxpayers to protect financial records that can be hard to replace.

A natural disaster can occur with little advance warning, putting family records at peril. The Internal Revenue Service encourages taxpayers to protect financial documents that can be hard to replace in the event of a storm, flood, fire or other calamity.

Here are some tips on safeguarding financial and tax records:

Paperless Recordkeeping

Many people now receive bank statements and documents by e-mail or over the Web, which can be accessed for document retrieval. Paper records, such as W-2s, tax returns and other documents, can be scanned into an electronic format.

With documents in electronic form, taxpayers can copy them onto a USB drive as a backup, which can be sent to a relative in another city for safekeeping in case the taxpayer’s computer and paper files are destroyed.

Other options include copying files onto a CD or DVD. Many retail stores also sell computer software packages that can be used for recordkeeping.

Documenting Valuables

Another way a taxpayer can prepare for disaster is to photograph or videotape the contents of his or her home, especially those items of great value. The IRS has a disaster loss workbook, Publication 584 ( PDF, 147K), which can help taxpayers compile a room-by-room list of belongings.

This recording process can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal situations change over time, as do preparedness needs. Individual taxpayers should make sure they are saving key documents. For example, it is wise to keep W-2s, home closing statements and insurance records.

In the Event of a Disaster

When faced with property damage, here are some suggestions from the IRS:

• Be sure to take photographs as quickly as possible after the casualty to establish the extent of the damage.
• Contact the title company, escrow company, or bank that handled the purchase to obtain copies of escrow papers.
• Use the current property tax statement for land vs. building ratios, if available. If not, get copies from the county assessor or auditor's office.

If disaster strikes, the IRS is ready to help with valuable information that can be requested if tax records are destroyed. Immediately after a casualty, a taxpayer can request a copy of a return and all attachments (including Form W-2) by using Form 4506 ( PDF, 68K), Request for Copy of Tax Return.

An information return or transcript can be ordered by calling 1-800-829-1040 or using Form 4506-T ( PDF, 83K), Request for Transcript of Tax Return. There is no fee for a transcript. Transcripts are available for the current year and returns processed in the three prior years.

NEA members can apply for home insurance coverage from either the NEA Members Auto & Home Insurance Program, underwritten by California Casualty Company, or the NEA Homeowners Insurance, underwritten by Horace Mann Insurance Company.