September is National Preparedness Month — an annual outreach campaign sponsored by the U.S. Federal Emergency Management Agency (FEMA). The goal of the program, which ends with a national day of action on Sept. 30, is to raise awareness of the need for people to prepare for all types of emergencies, including natural disasters.
Disaster preparedness
Disaster preparedness has been especially important recently. Numerous wildfires, storms, and other natural disasters, have already devastated homes and families in 2023.
- There have been more than 15 confirmed weather disasters in the U.S. so far this year, according to the Natural Centers for Environmental Information (NCEI).
- That number only includes weather disasters where damages were $1 billion or more. (The number of natural disasters in 2023 could be significantly greater.)
Severe weather and other types of emergencies can occur at any time, so it’s a good idea to prepare now if you haven't already. In addition to building a supply kit and developing a specific evacuation plan, your disaster plan should, the IRS says, include ways to protect important documents and information.
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National preparedness month IRS tips
Taxes probably aren’t the first thing that comes to mind when you think about National Preparedness Month, but natural disasters often impact federal and state tax filing and payments. That's why the IRS encourages taxpayers to have a preparedness plan that includes securing and duplicating essential documents so they know where to find information if needed.
For example, tax information and documents could become damaged or lost. More importantly, damages resulting from a storm may cause a change in your financial circumstances. That can affect your ability to pay taxes on time.
Thankfully, there are some steps you can take to help secure and protect information information and documents in preparation for possible disasters.
Secure documents to prepare for a disaster
You can reduce the chance of losing essential documents — including tax paperwork — in the event of a natural disaster by taking a few precautions.
- Lock documents in a fire and waterproof safe.
- Make copies of documents, and keep them at another location (such as a trusted relative’s home). If you do this, the home you choose should be outside of your potential disaster area.
- Scan important paper documents to store them digitally.
Keep in mind that how long you should keep tax records can vary, but past tax returns aren’t the only documents you should protect. You should also secure receipts related to your business or for certain home improvements. (Some of those improvements might qualify for a tax credit, and your insurance company may require receipts if you need to submit a claim.)
It is also wise to take inventory of business assets, including photo and video evidence, in the event your belongings become lost or damaged. You may be able to claim these losses when you file your tax return, and photo evidence may also be important for submitting insurance claims.
Disaster tax deadline relief
If you are impacted by a natural disaster, tax relief may be available from the IRS. For example, the IRS has already extended tax filing and payment deadlines for many disaster victims this year, including recent tax deadline extensions for Hawaii wildfire and Hurricane Idalia victims. This means you may have more time to file, and pay, federal taxes if you are impacted by a federally declared disaster. Taxpayers in several states have more time to pay estimated taxes as well.
States may also extend tax deadlines for storm and disaster victims. Taxpayers impacted by a disaster should check with their state’s Department of Revenue to see what relief may be available.
In addition to tax deadline relief, individuals and businesses may be able to claim uninsured and unreimbursed disaster losses when filing their federal tax returns. Casualty and disaster losses may reduce your adjusted gross income (AGI), which can lower overall tax liability.
Disaster preparedness sales tax holidays
Some states, including Florida and Texas, have sales tax holidays that allow shoppers to purchase certain disaster preparation products tax-free. National Preparedness Month is a good time to take stock of your supply of these or other important items.
Below are some items that are commonly tax-exempt during these sales tax holidays.
- Generators
- Household essentials (for example, toilet paper and laundry soap)
- Flashlights and portable radios
Larger items, such as impact-resistant doors and windows, may also qualify as tax-free in some states. Taxpayers should check their state’s website for more information about possible tax-free periods in their area.
For more information on National Preparedness Month, visit the federal Ready! website.
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