The recent Gulf Coast disaster is a tragic reminder of how easily we can lose essential tax and financial records. Few places in the United States are free from some type of natural disaster, whether it’s a hurricane, flood, tornado, wildfire, or earthquake. Even a house fire can destroy important records.
After a disaster, you’re more likely than ever to need certain records. You’ll likely be filing insurance claims, perhaps applying for a new mortgage, or taking out personal loans. You may even have lost the records you need to file your next tax return.
It’s smart to take the time to identify key records, make copies, and find a secure place to store them. Here are some suggestions to get you started.
What records do I need?
- You don’t need to copy every tax and financial record. Your banks, credit card companies, and investment brokerages will have records of your accounts and can probably supply details of recent transactions if needed. Your employer will have current payroll records, and IRA or 401(k) plan trustees will have details of your accounts.
- Keep a master list of all account numbers, with a contact phone number for each. That will make it easier to recover information after a disaster. If you handle transactions online, include your user ID and passwords.
- Keep copies documenting the purchase of your home or investment properties. Also keep records of expenses for remodels or other improvements that change your cost basis in the property.
- Your broker should have details of your original investments in stocks or bonds, but copy details of any investments you purchased independently. That includes numbers of U.S. savings bonds that you own.
- Make sure your will and estate planning documents are stored safely, either at your lawyer’s office or in another secure place.
- Consider keeping copies of your last three years’ tax returns, even if your tax preparer has duplicates. And finally, include a recent backup disk from your home computer.
Where should I store them?
There’s no single answer for every situation.
A bank safe deposit box should protect against most disasters, although it could be vulnerable to flooding. Sometimes a fireproof home safe is sufficient.
You could even consider storing key records at a relative’s house in a different region, although you need to safeguard against theft.
Wherever you decide to keep your records, take the time to prepare now.
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