A FINANCIAL PREPAREDNESS GUIDE
Natural disasters often strike with little warning, leaving behind much more than just physical damage. They can also throw your finances into chaos. In honor of National Preparedness Month, let’s talk about how you can protect your financial well-being, whether you’re an individual or a business owner. A little preparation now can save you a mountain of stress later. Gather and Protect Essential Documents Start by identifying the financial and legal documents you can’t afford to lose. These include:
Make both physical copies and digital backups. Store paper copies in a waterproof, fireproof safe at home, and keep digital copies in a secure, encrypted cloud storage service. This ensures you can access your information even if your home or office is damaged.
contact information accessible so you can act quickly if you need to request assistance.
Build a Community Strategy for Your Business
For business owners, financial preparedness means more than just safeguarding documents. Think about how you’ll keep operations running.
Create an Emergency Cash and Payment Plan
During disasters, power outages can make ATMs and card readers useless. Keep a small stash of cash in a secure place for essential purchases like food, fuel, and lodging. If you own a business, consider backup payment methods so you can continue serving customers even if your main system goes down. Have an IRS Gameplan If you’re already dealing with the IRS, whether it’s back taxes, an audit, or payment plans, don’t wait for disaster to strike before making a plan. The IRS offers disaster relief programs that may delay filing deadlines or payment dates for those affected. Keep your IRS correspondence and
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Maintain a list of critical vendors and their backup contacts. Keep a separate record of client information and outstanding invoices. Review your insurance coverage to ensure it includes disaster-related losses and business interruption.
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Identification (driver’s license, passport, Social Security cards) Financial records (bank account information, credit card numbers, loan documents) Insurance policies (home, auto, health, life, and business) Tax returns from the past three years Property records (titles, deeds, and lease agreements)
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Prepare Now, Stress Less Later You can’t control when a natural disaster will happen, but you can control how prepared you are. By securing your essential documents, having backup payment options, and knowing your IRS relief options, you’ll put yourself in the best position to recover quickly.
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WIN OF THE MONTH: FROM $24K OWED TO $35K REFUND
Our client, a CPA in Texas, found herself under audit after having a tax credit disallowed from an amended return. The IRS opened an audit for three years, asking for substantiation for all expenses, credits, income, capital gains, losses, etc. This was a massive undertaking, and our client simply didn’t have the time to pull together all the information. She hired us to prepare the audit response and argue that her expenses and her credit should be allowed. Being a CPA, our client kept meticulous records, and we were
Case Snapshot Client: CPA in Texas Type of IRS Issue: Personal Tax Years in Question: 2017, 2020, and 2021 IRS Claimed Liability: Full Disallowance of Refunds and Credits Savings: $35,587.29
able to examine all her expenses and offer proof that the credit should be allowed. The audit started with a proposed liability of $24,087.08 and ended with the client getting not just the credit restored, but a refund from the IRS of $35,587.29! This proves no one is immune to being audited, but with proper recordkeeping, the pendulum can swing your way!
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