Dallas, Texas (PRWEB) June 04, 2013
From hail storms and tornadoes in the spring, hurricanes in the summer and early fall, to the occasional ice storm in the winter, acts of nature cause damage to not only property but to pocketbooks. Being financially ready can save trouble and stress in the hours and days following a natural disaster. The Texas Society of CPAs recommends doing the following should a weather catastrophe occur.
GIVE YOURSELF TIME
Think through the situation, absorb what has happened, and seek advice. Don’t immediately make any important financial decisions in the wake of a disaster.
ASSESS YOUR FINANCIAL POSITION
The first step toward financial recovery is to prepare a plan for managing income, expenses, and debt. Determine whether you’re eligible for disaster relief funds from federal, state, or local governments. Make every effort to keep up with household bills. If this isn’t possible, call creditors to explain the situation and work out a payment plan.
FILE INSURANCE CLAIMS QUICKLY
Estimate the losses sustained as a result of a disaster, gather policy numbers, and file appropriate insurance claims. The earlier this is done, the faster the claim will be processed. Claims are frequently settled in the order in which they are received. If there is not a complete listing of household items damaged in the disaster, check with relatives and friends for photographs taken in the home that may help to support the claim.
CONSIDER YOUR ABILITY TO CONTINUE WORKING
Monthly disability insurance benefits may be available if injuries are sustained requiring time off from work. Apply as soon as possible to protect income. If you were injured while at work, you may also qualify for workers compensation benefits.
DEDUCT CASUALTY LOSSES
If property has been damaged or destroyed by a casualty and the loss meets IRS deductibility guidelines, property owners may be eligible for a tax refund based on unreimbursed losses. Usually, this means claiming the loss on the next income tax return. But in cases where a federal disaster area has been declared, a deduction may be accelerated by amending a return for the prior tax year.
REPLACE IMPORTANT DOCUMENTS
Determine the extent of the loss of valuable personal and financial records, such as a Social Security card, driver’s license, bank statements, stock certificates and recent bills.
REEVALUATE YOUR INSURANCE COVERAGE
Inevitably, disasters lead people to reconsider the role of insurance. Evaluate whether you have the right type and amount of property, health, disability, and life insurance.
SET UP AN EMERGENCY FUND
Take steps to establish a financial cushion equal to three to six months of living expenses. The fund can help manage other financial crises, such as unemployment. Keep these funds in a safe, easily accessible account, and do not use it unless it’s an emergency.
UPDATE YOUR WILL
For many people; it takes a disaster to point out the importance of having a will. A will names heirs and appoints a guardian if there are young children. If a person dies without a will, the state will decide who gets the possessions.
REVIEW YOUR LIFE GOALS
Disasters frequently cause people to reflect on the meaning of life and their money. Should less time be spent at work and more time at home? Is a career change necessary? Retire early? Pursue a lifelong dream? Many of these life goals come with financial consequences and require careful planning to be reached.
A CPA can help develop a financial recovery plan for regaining financial footing following a disaster. TSCPA states that proper planning and preparation beforehand is crucial when the unexpected takes place.
TSCPA (http://www.tscpa.org) is a nonprofit, voluntary, professional organization representing Texas CPAs. The society has 20 local chapters statewide and has more than 27,000 members, one of the largest in-state memberships of any state CPA society in the United States. TSCPA is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.