I was involved in a car accident in Dec 2015 in an rental car. Unfortunately, I did not had an insurance from rental company to be in the state of accident. So, all in all, I had to pay close to $6000 to the rental company in 2016 for vehicle damage. Can I deduct this amount from federal income tax? How do I go about doing that?
Thank You!!!
You'll need to sign in or create an account to connect with an expert.
Yes, to deduct a casualty or theft loss, you must itemize your deductions on Schedule A. The amount of your deduction is limited to the amount of the loss that exceeds 10% of your Adjusted Gross Income after a $100 deductible
As an example, if you had a $6,000 casualty loss, and your Adjusted Gross Income is $40,000, you would gain the following deduction:
After deducting $100, you are left with a $5,990 loss. Subtract $4,000 (10% of AGI) and you net a $1,990 deduction.
To report a Casualty or Theft loss -
Yes, to deduct a casualty or theft loss, you must itemize your deductions on Schedule A. The amount of your deduction is limited to the amount of the loss that exceeds 10% of your Adjusted Gross Income after a $100 deductible
As an example, if you had a $6,000 casualty loss, and your Adjusted Gross Income is $40,000, you would gain the following deduction:
After deducting $100, you are left with a $5,990 loss. Subtract $4,000 (10% of AGI) and you net a $1,990 deduction.
To report a Casualty or Theft loss -
This answer was good in 2019 but now it appears the tax law has changed for 2020. TurboTax has this explanation for 2020 changes under Casualty Losses:
"The casualty losses you can deduct are mainly limited to those caused by federally declared disasters. This includes hurricanes, floods, tornadoes, fires, and mudslides. If you experienced a loss that wasn't disaster-related, such as a theft, you can deduct this loss only to offset a gain from another casualty. This rule is an important change from prior years."
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
zbchristy501
Returning Member
palefty123
Level 1
Keithjwaz
Level 2
Vernman52
New Member
janaelin
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.