Vehicles, accidents, and claims/settlements

[Mr and Mrs B]

1. I had to buy two new (2024) vehicles this year due to being involved in accidents. Can I claim that to get some sort of tax deduction or tax relief? One car is strictly gas and the other is a gas/electric hybrid.

2A. The first accident (not a total loss -- received insurance money to cover repairs) resulted in my lawyer getting me a settlement due to injuries, as I was not at fault. How do I capture this when filing my taxes? Or do I even have to?

2B. The second accident (total loss -- received payout for vehicle) is still pending resolution with the insurance company and lawyers. We have been deemed not at fault. Any tax actions I need to take?

3. VA seems to tax everything unlike FL. I'm not familiar with what I can and can't claim on my taxes. When I registered the car in VA that I drove from FL, I had to pay property tax on the vehicle. This is a annual recurring fee. Can I claim that for a deduction or some sort of relief?

[mbpeddie]

Hello,

I am sorry to hear of our auto acccidents. That is terrible but I am glad you were deemed not at fault and were not seriously injured.

There is no reason to report these accidents on your tax return.

However there are credits for Hybrid cars and depending on what type of car it is you may qualify. Keep in mind this is a tax credit and it will only reduce your tax liability, and is not a refundable credit.

I have included a link with more information on this:

https://blog.turbotax.intuit.com/tax-tips/buy-a-hybrid-car-and-get-a-tax-credit-116/

Regarding the property tax you paid on the vehicle in VA. It is true that each state is different.

You can deduct the personal property tax on the vehicle in VA. However you must itemize your deductions to do so, rather than claiming the standard deduction.

The same is for the registration fees  in VA.Regarding deductibility of the vehicle registration fee, according to information on dmv.org/va, the Virginia registration fee is based on the vehicle weight, the type of plate, and the length of time you choose to register the vehicle. For the fee to be deductible on the federal tax return, it must be based on the value of the vehicle.