Form 4684 - Casualty and Theft Losses

Note: Losses you Can deduct for tax years 2018 through 2025: if you are an individual, losses of personal-use property from fire, storm, shipwreck, or other casualty, or theft are deductible only if the loss is attributable to a federally declared disaster (federal casualty loss). See Pub. 547 for more information.

If the event causing you to suffer a personal casualty loss occurred before January 1, 2018, but the casualty loss was not sustained until January 1, 2018, or later, the casualty loss is not deductible. 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.

Per IRS Publication 547, page 2:

Special rules and return procedures expanded for claiming qualified disaster-related personal casualty losses. Personal casualty losses attributable to a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) in 2016, as well as from Hurricane Harvey, Tropical Storm Harvey, Hurricanes Irma and Maria, the California wildfires, the disasters described in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, and the disasters described in the Taxpayer Certainty and Disaster Tax Relief Act of 2020, may be claimed as a qualified disaster loss on your Form 4684 for the year in which the loss was sustained. You can deduct qualified disaster losses without itemizing other deductions on Schedule A (Form 1040). Moreover, your net casualty loss from these qualified disasters doesn’t need to exceed 10% of your AGI to qualify for the deduction, but the $100 limit per casualty is increased to $500.

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Deduction Limits

After you have figured the amount of your casualty or theft loss, you must figure how much of the loss you can deduct.

The deduction for casualty and theft losses of personal-use property is limited. For tax years 2018 through 2025, personal casualty and theft losses of an individual are deductible only to the extent they’re attributable to a federally declared disaster. Personal casualty and theft losses attributable to a federally declared disaster are subject to the $100 per casualty and 10% rules, discussed later. The $100 and 10% rules are also summarized in Table 2.

To enter or edit your Form 4684 entries in the TaxAct program, go to our Form 4684 - Casualty and Theft FAQ.

The TaxAct program uses Form 4684 to figure the amount of your loss, and transfers the information to Schedule A (Form 1040) Itemized Deductions, Line 15.

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.

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