The newly enacted Federal Disaster Tax Relief Act of 2023 allows individual taxpayers affected by federally declared disasters to deduct personal casualty losses without itemizing deductions and without the typical reduction of $100 per casualty loss and 10% of adjusted gross income. Instead, the deduction would be reduced by $500 per casualty loss. If you had a personal casualty loss during 2024, the loss may be deductible on your 2024 tax return. It may also be beneficial to amend your return if you had a personal casualty loss in the years 2021 through 2023.
To qualify, the loss must have been the result of a Presidentially declared disaster area occurring no later than December 12, 2024. For a list of disaster area declarations by state and year, visit the IRS’s website at https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.