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You may be able to deduct part or all of each loss caused by theft, vandalism, fire, storm, or similar causes; car, boat, and other accidents; and corrosive drywall. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution.

You can deduct personal casualty or theft losses only to the extent that:

  • The amount of each separate casualty or theft loss is more than $100, and
  • The total amount of all losses during the year (reduced by the $100 limit discussed in (1) above) is more than 10% of the amount on Form 1040, Line 8b.

For 2019, the $100 limit per casualty is increased to $500 for qualified disaster losses. According to the 2019 Instructions for Form 4684, "A qualified disaster loss is an individual’s casualty or theft loss of personal-use property that is attributable to a major disaster declared by the President under section 401 of the Stafford Act in 2016, as well as those attributable to Hurricane Harvey or Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the 2017 California wildfires." For more details, see Qualified disaster losses on Page 3.  

The loss must be reduced by any salvage value and by any insurance or other reimbursement you receive or expect to receive.

IRS Form 4684 Casualties and Thefts is used to figure the amount of your loss to enter on Schedule A, line 15. To review or modify the Form 4684 entries in your TaxAct® return:

  1. From within your TaxAct return (Online or Desktop) click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Itemized or Standard Deductions in the Federal Quick Q&A Topics menu to expand the category, and then click Casualty or theft losses
  3. Click Yes and the program will proceed with the interview questions for you to enter or review the appropriate information

TaxAct will use the higher of your itemized deductions or the standard deduction for your filing status to maximize your tax benefit. If you do not itemize deductions, you cannot deduct casualty and theft losses and Form 4684 will not print with your return. However, you can separately print the form to review the calculations.

See the IRS Instructions for Form 4684 for additional information. For certain exceptions and lists of deductible and nondeductible losses, see IRS Publication 547.


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