Don't Mess With Taxes

Drone composite image of the significant damage to structures in downtown Sulphur, Oklahoma. A large part of the small town in south-central Oklahoma was struck by an EF3+ tornado on April 27, 2024. (Photo by Wikiwillz via Wikipedia Commons)

The United States’ tornado season used to be in the spring, with most of them occurring in the middle of the country known as Tornado Alley.

But things have changed. Or maybe data collection improved.

Whatever the reason, tornado-spawning storms are showing up almost year-round, and they’re showing up well beyond the original Tornado Alley boundaries.

This year could be one of the worst for twisters in a while. More than 170 tornadoes were recorded across the country in the first three months of 2024. Then came April.

The twister count last month alone ballooned to more than 373 confirmed tornadoes. Preliminary data from the National Oceanic and Atmospheric Administration (NOAA) Storm Prediction Center show that the documented tornadoes so far (at least 549) far surpasses the 10-year average of 379 tornadoes typically seen from January to April.

Late April tornado outburst: On April 26-27 alone, a storm system that crossed the Great Plains produced more than 100 confirmed tornadoes. More deadly tornadoes erupted over last weekend in Arkansas, Oklahoma, and Texas.

In addition to the loss of life, the storms wiped out neighborhoods, leaving tens of thousands without homes or businesses.

Long relief and recovery road: The recovery will be long and difficult for many in the tornado paths.

Federal assistance will be available after Federal Emergency Management Agency (FEMA) issues a major disaster or an emergency measures declaration. The Internal Revenue Service will follow that with relief, which typically includes postponed tax filing and payment deadlines dates for affected individuals and businesses.

Those who live in any areas where disasters are common — that’s basically the entire country — also can prepare for the severe storms, tornadoes, hurricanes, floods, blizzards, or whatever other catastrophes tend to target them.

You can get an idea of these preparations in my hurricane season post from last year. I’ll revisit this annual task on the ol’ blog in a few weeks as the official June 1 tropical storm season start nears.

In advance of those storm prep reminders, the start of May, which is National Wildfire Awareness Month, also is a good time to review the steps you can take to protect important tax and financial information as part of your disaster emergency plan. Here are some suggestions from the IRS.

Protect and make copies of important documents. Put your original tax returns, Social Security cards, marriage certificates, birth certificates, and land ownership documents in a secure, waterproof container in a safe space. It’s a good idea to make copies of these important documents, and store them in a secondary location such as a safe deposit box or with a trusted person who lives in a different area. If you prefer to go digital, you can scan the documents and save the files in the cloud. You also can keep a copy of the digital records on a flash drive for easy access and portability.

Keep a record of valuables. An inventory of both your personal and business documents is vital piece of information. You can use this when you file insurance or tax claims. You cell phone makes this inventory process easier. You can take both still photos and videos, which then are time and date stamped for your records. Take separate inventories of your home and personal property and, if you’re a business owners, your company’s material.

Rebuild your lost records. If you’re hit by a disaster before can secure your records, you’ll need to reconstruct or replace them. As noted earlier, you need the info to claim federal assistance or file for insurance reimbursement. Where you have losses not covered by insurance, you’ll need to records to file a major disaster loss tax deduction claim. The more accurate your loss claim, the more loan and grant money there may be available.

You can find more in my post Tips on rebuilding tax and other records lost in a disaster. IRS.gov also has the webpage Reconstructing Records After a Natural Disaster or Casualty Loss, which is a good starting point.

Check payroll service fiduciary bonds. Disasters can impact a business’ ability to make timely federal tax deposits. If you use a payroll service provider, check if the provider has a fiduciary bond in place that can protect you and your company in the event the service defaults. That’s just one of the steps the IRS suggests when your company chooses a payroll service provider.

You also might find these items of interest:

• 6 hurricane prep tips for businesses
• File major disaster claims on Form 4684
• IRS and other government resources can help you deal with a natural disaster
• Storm Warnings: A guide to preparing for and recovering from natural disasters

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