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Being Ready is Key

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A quick glance at the Weather Channel is all we need to get the idea that the climate is unpredictable.

The extraordinary number of hurricanes, the polar vortex slippage and accompanying deep freeze, and now the violent storms and tornadoes ripping across the country, say it all. From fires and droughts to floods and mudslides, natural disasters are all around us.

While these may come upon us suddenly, giving us a sense of impotence, often there is some time to prepare.

A recently published IRS email was focused on pointing out that we can all be more prepared for the natural disasters that are becoming inevitable.

Common sense makes sense

Implementing some of the most important steps can help to mitigate the loss or devastation you may encounter when damages occur due to natural disasters.

First of all, personal safety is at the top of the list. Every home and every business should have a current disaster plan in place that includes an evacuation process as well as a post-evacuation process.  This should be discussed frequently, and if possible, a ‘drill’ should take place regularly so that everyone is comfortable knowing they have an escape route should that be necessary. 

When Hurricane Sandy hit the New Jersey area, for example, our firm had the ability to reach every employee, to ensure they were safe. This was only possible because they had a readily available cell phone number for each of us. With limited electricity, we kept in touch via conference calls to ensure that we were able to work remotely in the immediate aftermath of the storm, while also establishing a realistic schedule for returning to work when the danger had passed. 

Getting out of the dangerous situation is the first step and remaining in touch is part two of the process.          

After each person’s physical safety is assured, attention can be turned to the company’s or family’s important documents.

There should be electronic copies of anything that is deemed essential for a company or individuals to retain. This may be bank statements, invoices, tax returns, estate plans, insurance policies and other critical materials. Because it is so easy to scan and preserve papers today, it is reasonable to assume that even if destroyed, there is an electronic back up version that is safely stored and easily retrievable.

Rarely does anyone fix their roof while the sun is shining yet we are continuously reminded that it never pays to put off fixing the roof until it is raining! Instead, it is advisable to take the necessary steps before an emergency situation occurs. Video your valuables, including pieces of art and jewelry. In addition, keep a permanent, digital record of all your records, just to be on the safe side. To help with this project, the IRS has published a “disaster loss workbook” to guide you in assessing and recording your individual belongings. This can be downloaded at https://www.irs.gov/pub/irs-pdf/p584.pdf.

Tax relief is available in disaster situations

Taxpayers should be aware that the Tax Cuts and Jobs Acts has modified the itemized deduction for casualty and theft losses. After Dec. 31, 2017, net personal casualty and theft losses are deductible, only to the extent they are attributable to a federally declared disaster. Claims must include the FEMA code assigned to the disaster.

No one can anticipate the future nor can we predict when another natural disaster will occur.  But we can be ready and do our best to minimize additional hardship.

The IRS reminds us all that in the case of a federally declared disaster, taxpayers can call the IRS at 866-562-5227.

Mariana Moghadam, CPA
SobelCo

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