Disasters and Your Tax Documents

Crazy woman with tax sheets

It’s rainy season in South Florida. That also means that it’s hurricane season. While we haven’t had a bad storm down here in a few years, the threat of destruction is always there each year. We make plans for keeping our families and homes safe, but what about important items like tax documents? Everyone needs a plan for when disasters strike.

One solution is to keep electronic records. Many banks have documents available online. Old tax returns and related documents and insurance policies can be scanned and saved in the cloud to electronic storage such as Dropbox, Box, or Google Drive. Many modern CPA firms like mine are paperless- ask your CPA to send you PDF versions of prior year tax returns. PDFs can be password protected to help keep your information secure.

Another solution is to keep paper duplicates in a safe location. This can be useful when you lose power and need to access information. We often leave copies of important documents with family members. Safe deposit boxes at banks are another option. The rental fees on these are tax deductible if you itemize your deductions on Schedule A.

The IRS can alwasy be your backup plan. By filing Form 4506 and paying a $50 fee you can get a copy of your tax returns. You can also request free transcripts of all your tax information (W-2s, 1099s, etc.).

For more information visit the IRS’s Disaster Relief website.

2014 Health Care Savings Account (HSA) inflation adjusted amounts announced

HSA Limits

The IRS just released information regarding the 2014 inflation adjusted amounts for Health Care Savings Accounts (HSAs).  For 2014 the annual limit for individuals is $3,300 and for families is $6,550.  To be eligible to contribute to an HSA you must have a high deductible health insurance plan.

High Deductible Health Insurance Plans

For a plan to be considered “high deductible” the deductible must be at least $1,250 for individuals and $2,500 for families, and max out of pocket expenses cannot exceed $6,350 for individuals or $12,700 for family coverage.

To read the full IRS Revenue Procedure 2013-25 click here.