The Enid News and Eagle, Enid, OK

Ag

June 29, 2013

Proof of loss is needed for tax return

ENID, Okla. — Each year Oklahoma residents lose property to tornadoes, fires, floods and other natural events.

Financial losses often can be deducted on your tax returns; however, proof of the loss has to be shown. This article describes the various types of records needed to substantiate the loss and determine the amount that may be allowed as a deduction and how to safeguard these records from being lost as well.

Here are some simple steps that can help individuals and businesses protect as well as retrieve personal, financial, and tax records in case of disasters:

• Electronic bank statements and documents that may be received via email are an outstanding way to secure financial records as the financial institution maintains copies.

• Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format. This information often can be retrieved as well.

• Be sure you back up any computer-based electronic files and store the copies in a safe place. Making duplicate copies and keeping them in a separate location is a good business practice. Another option includes copying files onto a compact disk. Also, many retail stores sell computer software packages you can use for personal as well as business record keeping.

• When choosing a place to keep your important records, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home also is likely to affect other facilities nearby, making quick retrieval of your records difficult and maybe even impossible.

Getting your records in order

Eileen St. Pierre, Oklahoma State University’s personal financial specialist, has prepared a fact sheet titled “Getting Your Records in Order: Organizing Household Records” that offers several helpful tips for organizing your home office space, identifying and inventorying important papers, determining how long to keep various types of records, etc. Perhaps the most helpful reminder is to create a household inventory, which is applicable to not only natural disasters, but also theft.

This is fairly easy. Create an inventory by using a digital camera to take pictures of your belongings. Store the pictures in a computer file, along with descriptions (including serial numbers, purchase date, original cost and estimated current value) by each of the pictures. Do not just keep this information on your computer’s hard drive; but also store a copy on a compact disk or flash drive.

Put the copy in a safe place or in an easily accessible place if you need to evacuate. Also, print the inventory list and keep it at another location, such as in a safe deposit box.

To help make this task easier, the Insurance Information Institute offers free home inventory software at http://www.knowyourstuff.org. You must register to use it, but it allows you to email your inventory list to anyone you choose, such as an adviser, a family member or friends. For each room of your house, upload files containing digital photos and scanned receipts of all the items in that room. Digital photos of the exterior can also be added.

Disasters can strike at any time, but by following a few easy steps to be organized and prepared, the process of recovery can ideally be smooth and relatively fast.

For information on the referenced fact sheet above, visit your local OSU Extension office or access the information online at http://pods.dasnr.okstate.edu/docushare/dsweb/HomePage and search for fact sheet number T-4150 “Getting Your Records in Order: Organizing Household Records.”

Hobbs is Oklahoma Cooperative Extension Service assistant extension specialist for Garfield County.

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