Property loss I had to pay out

Forum|Forum|2 years ago
November 14, 2023
2 replies
2 views

Is a payout for damages for uninsured driver deductible?

xmasbaby0

Level 15

Was this for your personal vehicle or a vehicle used for business? If it was for your personal vehicle, there is not a deduction. Casualty losses were eliminated as a federal deduction when the tax laws changed for 2018 and beyond, for any sorts of casualty losses except those attributed to being in a federally declared disaster area.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Opus 17

Level 15

If you are engaged in some type of business, the cost of an accident that occurs during the course of business is usually a deductible business expense. Except that you can't deduct costs for doing something illegal. (For example, if you got a ticket for running a red light and were convicted and paid the fine, then you could not deduct damages you caused as a business expense.)

As noted, there is currently no federal deduction for personal casualty losses. You can list the loss in Turbotax because some states may allow a deduction if you itemize, but the thresholds for casualty losses are pretty high. The loss would have to be more than 10% of your income to even begin to be deductible on your state return.