We have discussed in the past how long you should maintain your tax records. However it is also important to make sure that the records are safe. In the event of a fire, flood, tornado or other disaster, you need to keep your records available.
The IRS recommends:
Many bank and financial statements are available through your account on your bank’s website. These records are securely stored. But you can also scan records yourself onto an electronic format. Consider placing important records (tax records, insurance policies, etc.) onto an external hard drive, UBS drive, or CD/DVD. Always keep your records in a safe place. Store duplicates in a waterproof container in a different location from the originals.
In the event of a disaster, it’s helpful to have a visual record of your home or business. Taking photos or videos of those places can help with insurance claims or casualty loss deductions on your tax return when you need to prove the value or items that were lost. Always store the photos and videos in a safe place. You could have a trusted friend or relative who lives in a different location store them images for you.
We will be taking a break for a couple of weeks and will be back with a new edition on July 7th.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein