Casualty and Theft Losses

Can I claim casualty and theft loss deductions on my tax return?

Before the Tax Cuts and Jobs Act (TCJA) was passed in late 2017, taxpayers were allowed to claim casualty or theft losses – if you lost property because of something like a robbery or a flood, you could deduct part of the loss as part of your itemized deductions, so long as the loss exceeds 10 percent of your adjusted gross income (AGI) and $100.

The TCJA changed these rules about casualty losses. Between the 2018 and the 2025 tax years, the ability to claim all casualty and theft losses has been eliminated. However, you can still deduct qualified disaster-related casualty losses if they occur within a federally declared disaster area – like the aftermath of a flood, hurricane, or tornado. The Disasters Act in December of 2019 changed the way you can claim a deduction for a major disaster loss between January 1, 2018 and February 18, 2020.  To calculate the deduction during this time, you do not have to itemize deductions and subtract $100 per loss and 10% of AGI. Instead, subtract $500 from each major disaster and add the loss to your standard deduction if you aren’t itemizing deductions.

Prepare for a potential disaster loss now. 

Make an inventory list of all the items in your home, or video all your belongings inside and the outside of your home and your vehicles, or do both.  Make sure you either save a copy by:

• Uploading the video and/or inventory list to a cloud storage account,

• Giving it to a trusted family member or friend

• Putting it in a safety deposit box in a different area

Make sure your insurance is up to date, and be sure to have a go-bag ready. This is a waterproof bag with important documents such as birth certificates, Social Security cards, marriage licenses, and even divorce decrees.  There are many other papers that you can put into this go-bag, but most can easily be accessed via an online account.