The tax treatment of personal casualty losses and thefts is changed under the Tax Cuts and Jobs Act. Pursuant to the TCJA, the itemized deduction for personal casualty and theft losses is temporarily limited in tax years 2018 through 2025 solely to losses attributable to federally-declared disasters.
You can't claim the theft of your tools if the tools are for personal or if you are an employee.
If you are a contractor or self-employed, you can deduct your loss (the part not covered by insurance) based on the fair market value of the tools as defined in Publication 584-B (Schedule 6). The value of the loss is then transferred to form 4684.
[Edited 02/20/24 | 4:03PM PST]
@philspargo @mesquitebean I have edited my answer
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