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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 U.S. Individual Income Tax Return, Line 8b.

For 2020, the $100 limit per casualty is increased to $500 for qualified disaster losses. According to the Instructions for Form 4684 Casualties and Thefts, "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 from Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or from the California wildfires in 2017 and January 2018."

For more details, see Qualified disaster losses. on page 2.

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

Form 4684 is used to figure the amount of your loss to enter on Schedule A (Form 1040) Itemized Deductions, 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 in the upper left-hand corner, then click Federal.
  2. Click Itemized or Standard Deductions in the Federal Quick Q&A Topics menu to expand, then click Casualty or theft losses.
  3. Click Yes to continue with the interview process to enter all of 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 Casualties, Disasters, and Thefts.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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