While no one likes to think about it, disasters happen and you need to be prepared ahead of time. I encourage my individual and business clients to safeguard themselves against natural disasters by taking the following steps:
Create a Backup Set of Records Electronically: Data storage space has become inexpensive. You should keep a set of backup records, for example, bank statements, tax returns, insurance policies, etc., in a safe place. The backup should be stored away from the original set. These days, many financial institutions provide statements and documents electronically, and a lot of financial information is available on the Internet. Even if your original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, you can download them to a backup storage device, like an external hard drive or SSD drive. I recommend saving 1 copy in a safe deposit box located in XYZ Bank and 1 copy in ABC bank, also, in a safe deposit box. I recommend a minimum of 5 Drives in the rotation and they should be constantly rotated.
Another step you can take to prepare for disaster is to photograph or videotape the contents of your home, especially items of higher value. On its website, the IRS has a disaster loss workbook, Publication 584, which can help with compiling a room-by-room list of belongings.
A photographic record can help you prove the market value of items for insurance and casualty loss claims. Photos should be stored on the Hard drive or SSD drive as described above.
Update Emergency Plans: Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.
Check on Fiduciary Bonds: If you use a payroll service in your business, you should ask the provider if it has a fiduciary bond in place. The bond could protect you in the event of default by the payroll service provider.
Please contact the office of Don Fitch Accountancy at (760)567-3110 or Email Don.Fitch@CPA.com if you have any questions or would like additional information.
DON FITCH, CPA
74478 Highway 111 #3
Palm Desert, CA 92260
Toll Free: (877)CPA-Help or (877)272-4357
P.S. My firm is based upon referrals. Please feel free to refer my firm to anyone you know that is looking for a new CPA and/or tax preparer. Thank you in advance.
(Updated 03/28/2021 320-232)