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Tax Blog

Form 4684 Casualties and Thefts

In 2017, hurricanes battered the Gulf Coast, wild fires raged thru California, floods devastated Missouri, and Earth Quakes shook Montana.

To provide support for such catastrophes, Congress included additional tax relief in the form of a casualty disaster loss deduction within The Bipartisan Budget Act. However, many taxpayers are unaware that casualty disaster loss is an available benefit in lowering their tax burdens.

To qualify, a casualty disaster loss must be caused by a specific incident outside of normal wear and tear or progressive deterioration. Events that qualify for a casualty disaster loss are most often theft, fire, or flood. But, there are limitations, the loss must be more than 10% of your adjusted gross income (AGI) with an additional $100 subtraction from each casualty disaster loss you intend to claim. For instance, a person that makes $20,000 a year would be entitled to a $1,900 deduction on a stolen computer worth $2,000.

Everyone at some point in their life will suffer some type of loss. If you need help determining whether you qualify for a deduction on your income tax return due to a casualty disaster loss contact The Center for Financial, Legal & Tax Planning, Inc. to make an appointment with one of our professionals. Phone: 618-997-3436 Email: Like/share Basi, Basi & Associates on Facebook.

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