The beginning of a new year is an important time to review your preparedness for an emergency. With the Atlantic hurricane season approaching in just a few short months, that includes making sure you’re ready for a natural disaster.
Some aspects of getting ready for a potential natural disaster seem obvious. Stocking up on nonperishable food and drinking water, keeping a first aid kit handy, and outlining an evacuation plan are all great ideas.
But what about your key documents, like bank statements, tax returns, deeds, and insurance policies?
Being prepared for a natural disaster from the perspective of being a taxpayer may not be the first thing that occurs to you. And to be clear, your life is always the first priority. If a storm is bearing down on your house and you have the choice between grabbing the title to your car or getting to safety, then you should get to safety.
With preparation, you can avoid having to make that choice, save yourself the trouble of replacing all of your important documents to file your tax returns, and put yourself in the best position for tax relief or benefits claims as you deal with the aftermath of the disaster.
Taking a few simple steps to prepare for a natural disaster as a taxpayer can help protect you against the loss of financial records, personal documents, insurance records, and more. Read on to discover:
Although your essential records and documents are usually replaceable, you will save yourself a lot of time and headache after a natural disaster by taking a few simple steps now. The list of documents you should secure is not short, so it isn’t a good idea to wait until the hurricane makes landfall to locate and gather them.
Everyone has personal and family documents, so include any of the following that apply to you as your top priorities:
You may also have citizenship papers, a marriage certificate or divorce decree, child custody or guardianship papers, a military discharge or ID, or pet records, including medical and vaccination records, current photos, and ID chip numbers.
There are also financial and legal documents you should be sure to remember. These can include:
Once you have gathered and taken inventory of your records and documents, it’s time to store them safely. In the event of a natural disaster, you will be glad if you have invested in a watertight and fireproof safe for the home. Alternately, you could choose to store your documents in a safe deposit box outside the home.
Regardless of where you keep your records, it is also a good idea to create copies, store them separately at a different location, or entrust them to a family member who lives outside of the area the disaster may affect. Finally, create digital copies of your documents and store them in the cloud. For added peace of mind, find a cloud service that offers data encryption and extra layers of security to prevent breaches and ransomware.
So, what if the worst should happen, and you suffer a loss of valuable property or possessions? In that case, you may need information on…
Suppose you are filing an insurance claim or applying for tax relief in the wake of a disaster. In that case, photographs or videos of the contents of your home or business, and especially of high-value items, can be handy.
In fact, creating a comprehensive home inventory can be advantageous for multiple reasons. In addition to helping right-size your insurance coverage, a list can result in a higher appraisal for your home and serve as a valuable resource in estate and financial planning.
At the very minimum, a detailed list of items destroyed, damaged, or lost is usually required for any insurance claim. Still, complete inventory with photographic documentation will make the claims process much faster and more efficient.
The IRS has a disaster loss workbook for individuals (Publication 584, Casualty, Disaster, and Theft Loss Workbook) and businesses (Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook) that can help people compile lists of belongings or business equipment.
Although it is possible to complete a home inventory by yourself, it can be very time-consuming, and the undertaking is commonly left unfinished. Alternatively, you could consider hiring a professional home inventory company to complete it for you in about one week.
They will record descriptions of all items, model and serial number where relevant, cost and purchase date, manufacturer, estimated or appraised replacement value, and heir designation, if applicable. They will also scan receipts and important documents where possible and shoot photos and video footage of your possessions.
Hiring such a company is relatively affordable and a worthwhile investment should damage or loss occur.
For employers, the aftermath of a natural disaster can be a stressful and overwhelming time, especially if there has been damage to your facility, equipment, or products. The last thing you, or your employers, want to deal with is a default by your payroll service provider.
This is especially important because employers are sometimes obligated by state and federal law to pay employees who are exempt from the Fair Labor and Standards Act their full salary, even if the business cannot open for less than a week due to weather damage. (You are not required to compensate non-exempt employees or employees who are paid hourly wages or a salary less than the minimum amount as determined by the Department of Labor if your business is destroyed.)
However, a fiduciary bond could protect your payroll taxes should this occur. Also known as probate, executor, administrator, conservatorship, or guardianship bonds, fiduciary bonds essentially serve as insurance to protect beneficiaries, heirs, or creditors when a fiduciary breaches duty. Call your payroll provider and ask whether they have a fiduciary bond in place—most states do not require it, and defaults can and do happen after a disaster.
There is only one wrong time to prepare for a natural disaster: When one is already on the way! And after disaster strikes, it will be too late. Some things are out of your control, but you can still take practical steps to minimize the impact of a natural disaster and put yourself in the best possible position to recover.
Making an effort to secure and protect your key documents and records now will pay off should the worst occur.
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Jeff Coyle, CPA, Partner of Rosenberg Chesnov, has been with the firm since 2015. He joined the firm after 20 years of business and accounting experience where he learned the value of accurate reporting, using financial information as a basis for good business decisions and the importance of accounting for management.
He is a diligent financial professional, able to manage the details and turn them into relevant business leading information. He has a strong financial background in construction, technology, consulting services and risk management. He also knows what it takes to create organizations having built teams, grown companies and designed processes for financial analysis and reporting.
His business experience includes:
Creating and preparing financial reporting, budgeting and forecasting.
Planning and preparation of GAAP and other basis financial statements.
Providing insight on financial results and providing advice based on those results.
Jeff also has a long history of helping individuals manage their taxes and plan their finances including:
Income tax planning and strategy.
Filing quarterly and annual taxes.
General financial and planning advice.
Prior to joining the firm in 2015, Jeff was in the private sector where he held senior financial and management positions including Controller and Chief Financial Officer. He has experience across industries, including construction, technology and professional services which gives him a deep understanding of business.
Jeff graduated from Montclair State University, he is a CPA and member of the American Institute of Certified Public Accountants, New York State Society of Certified Public Accountants and New Jersey State Society of Public Accountants.
Jody H. Chesnov, CPA, Managing Partner of Rosenberg Chesnov, has been with the firm since 2004. After a career of public accounting and general management, Jody knows the value of good financials. Clarity, decision making, and strategy all start with the facts – Jody has been revealing the facts and turning them into good business results for more than three decades.
He takes a pragmatic approach to accounting, finance and business. His work has supported many companies on their path to growth, including helping them find investors, manage scaling and overcome hurdles. His experience and passion for business reach beyond accounting and he helps businesses focus on what the numbers mean organizationally, operationally and financially.
He has a particular expertise in early-stage growth companies. His strengths lie in cutting through the noise to come up with useful, out of the box, solutions that support clients in building their businesses and realizing their larger visions.
Prior to joining the firm in 2004, Jody was in the private sector where he held senior financial and management positions including General Manager, Chief Financial Officer and Controller. He has experience across industries, which gives him a deep understanding of business.
Jody graduated with a BBA in Accounting from Baruch College, he is a CPA and member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants.
In addition to delivering above and beyond accounting results, Jody is a member of the NYSCPA’s Emerging Tech Entrepreneurial Committee (ETEC), Private Equity and Venture Capital Committee and Family Office Committee.
He is an angel investor through the Westchester Angels, and has served as an advisor for many startup companies and as a mentor through the Founders Institute.
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