If you have been involved in an automobile accident, the damage to your car may be considered a casualty loss if you itemize deductions. This would apply if the loss were not due to your negligence or the negligence of someone driving your vehicle. The loss must first be reduced by any insurance or other reimbursement plus $100, and then by 10% of our adjusted gross income.
If the President of the United States declares your area a federal disaster area, you have a choice of which tax year to deduct a casualty loss. You may deduct the loss for the year in which it occurred, or you may choose to amend your previous year's return and deduct the loss in that previous tax year for a faster refund.
Unfortunately, theft and natural disasters such as floods, tornadoes, and hurricanes occur. The good news is that you may get a tax break. Damage to your home and possessions which occur due to theft, fire, storm, or another natural disaster is deductible if you itemize your deductions. The loss must be reduced by any insurance or other type of reimbursement plus $100, and then by 10% of your adjusted gross income.
To deduct a casualty or theft loss, you must itemize deductions and be able to prove that a casualty or theft loss occurred and provide proof of the amount that you deduct. Each casualty or theft loss is reduced by any reimbursement and by $100, and is further reduced by 10% of your adjusted gross income.