Form 4684: Reporting Casualty and Theft Losses in 2025
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Key Takeaways
- Form 4684 is used to report losses from unexpected events like theft, fires, or natural disasters. If your property gets damaged or stolen, this is the form you may need to help claim a deduction on your taxes.
- For personal-use property, your loss must be tied to a federally declared disaster to be deductible. If it’s not part of a disaster declared by the government, you probably can’t claim it.
- Business and income-producing property losses reported on Form 4684 don’t need to be connected to a federally declared disaster, and the rules for deducting them are more flexible.
- There are limits and thresholds that apply to personal casualty losses. The IRS requires you to reduce each loss by $100 and then only allows you to deduct what exceeds 10 percent of your adjusted gross income.
- Form 4684 feeds into other parts of your tax return. If you’re claiming a personal loss, it usually gets reported on Schedule A. If it’s business-related, it may go on Schedule C, E, or F, depending on the nature of your income.
When disaster strikes (whether from a storm, fire, theft, or another unexpected event) the emotional and financial toll can be huge. If you’ve experienced a significant loss and you’re trying to recover both physically and financially, you might find some relief through the tax system. That’s where Form 4684 comes in.
This IRS form is used to report casualty and theft losses on your tax return, and depending on the situation, it could help lower your tax bill. But, you have to use it correctly, which can be a little tricky if you’re not all too familiar with it (and be glad if you’re not!).
If you’re wondering whether you need to use Form 4684, how it works, or what kinds of losses qualify, you’re in the right place. Let’s break it all down together in a way that’s thorough but still easy to follow.
What Is Form 4684?
Form 4684, officially titled “Casualties and Thefts”, is a tax form you use to report property losses due to sudden, unexpected, or unusual events. These events typically include things like natural disasters (think really destructive stuff like hurricanes, wildfires, earthquakes, etc.), theft, vandalism, or car accidents that weren’t your fault.
The form allows you to report the damage or loss and potentially claim a deduction—if you meet the requirements. Keep in mind that the IRS doesn’t let you write off just any loss. It needs to be a qualified casualty or theft, and for most people, it has to be connected to a federally declared disaster.
Types of Losses That Qualify
To use Form 4684, your loss has to be caused by a sudden, unexpected, or unusual event. That means long-term wear and tear, damage from negligence, or gradual deterioration won’t count. Essentially, it has to be sudden and catastrophic. Dramatic as it sounds, there is little place for interpretation.
Here are some common situations that may qualify:
- Your home or car is damaged in a hurricane or tornado that’s officially declared a federal disaster
- A fire destroys part of your personal property
- Your belongings are stolen in a burglary
- A car accident (that wasn’t your fault) results in a loss, and insurance doesn’t cover it fully
It’s also important to note that Form 4684 can be used for both personal-use property and business or income-producing property, but the rules for how you calculate and deduct the losses are different depending on which category your property falls into.
The Federally Declared Disaster Rule
This is a key detail that trips a lot of people up. Since the Tax Cuts and Jobs Act went into effect, you can only deduct personal casualty losses if the damage occurred in a federally declared disaster area. That means if your property was damaged in a local storm or isolated event that didn’t make it onto FEMA’s disaster list, you likely won’t qualify for a deduction—even if the loss was substantial.
If you’re not sure whether your situation qualifies, check the FEMA website or IRS disaster resources for a current list of federally declared disasters in 2025.
Filling Out Form 4684 Step by Step
Form 4684 is broken down into multiple sections, depending on the type of property and the nature of the loss.
Section A is where you report losses on personal-use property. This is where most individuals will start. You’ll describe each item or group of items lost or damaged, then calculate the fair market value before and after the event. You’ll also subtract any reimbursements from insurance or other sources.
After that, the IRS applies two main limits. First, you must subtract $100 from each individual loss. Then, you can only deduct losses that exceed 10% of your adjusted gross income (AGI). This means that small losses may not actually result in any tax break once the math is done.
Section B is for business or income-producing property, such as rental properties or tools used for work. The calculation is a bit more favorable here since there’s no 10% AGI threshold and the $100 rule doesn’t apply.
You may also need to fill out Section C if you’re reporting gains related to involuntary conversions (like insurance payouts that were more than the loss). Not common, but worth knowing.
Documentation and Records You’ll Need
To use Form 4684 effectively and safely in case of an audit, you’ll want to have strong documentation. That includes before-and-after photos of damaged property, repair estimates, police reports (if it was a theft), appraisals, and all communication with your insurance company. The IRS expects you to be able to prove the value of what was lost and how you calculated the final numbers on your form.
How Form 4684 Connects to the Rest of Your Tax Return
Once you’ve filled out Form 4684, the results usually get carried over to Schedule A (if it’s a personal loss) or directly to your business income schedules (if it’s a business loss). That’s why you need to be clear on whether the property is personal or related to your work or investments.
For many filers, especially those with multiple properties or partial reimbursements, the form can get a bit complicated. But once it’s done correctly, it can make a noticeable impact on your tax liability.
Form 4684 in 2025: What’s Changed?
As of 2025, the general rules for casualty and theft losses remain largely the same under current tax law. The biggest thing to keep an eye on is the list of federally declared disasters, which changes every year depending on what events occurred and where.
If Congress updates the tax code to allow broader deductions or makes temporary exceptions (like they sometimes do after major disasters), you’ll want to watch for that. But at this point in the year, the standard rules from the Tax Cuts and Jobs Act are still in effect.
When You Should Consider Getting Help
If you’ve had a major loss and the situation involves complex issues like multiple properties, a partially reimbursed claim, or business assets, don’t hesitate to reach out to a tax professional. A CPA or enrolled agent can walk you through the form and help you make sure you’re not missing deductions—or making errors that could get flagged later.
Even for straightforward personal losses, sometimes it helps to have someone double-check your math or give you peace of mind before you file.
The Final Word on Form 4684…
Dealing with a disaster is stressful enough without having to navigate the tax implications on your own. But if you’ve suffered a serious casualty or theft loss, Form 4684 is a valuable tool that can help ease some of the financial pressure. It’s not a silver bullet, and not every loss qualifies, but when used properly, it can lower your tax burden and help you recover faster.
If you think your situation might qualify, take the time to read the instructions carefully, gather your documentation, and fill out the form accurately. And remember—you’re not alone in this. There are resources out there, and professionals who can help guide you through it.
FAQ: Form 4684 (Casualties and Thefts)
1. What kinds of events qualify for a loss deduction using Form 4684?
Only certain types of events are considered eligible under IRS rules. To be deductible, the event must be sudden, unexpected, or unusual. That usually means things like hurricanes, wildfires, floods, thefts, or other natural or man-made disasters. For personal-use property, the loss must be the result of a federally declared disaster to qualify for a deduction. That means if your home was damaged in a freak thunderstorm that wasn’t declared a federal disaster, you probably won’t be able to claim anything. On the other hand, losses related to business property don’t have to meet that federally declared disaster requirement.
2. How do I figure out how much of my loss I can actually deduct?
This part can be a little tricky. First, you need to calculate the fair market value of the property before and after the loss. Then subtract any insurance or reimbursement you received. For personal losses, the IRS requires you to reduce the loss by $100 per incident. After that, you can only deduct the amount that exceeds 10 percent of your adjusted gross income. So, if you had a $10,000 loss and your AGI was $60,000, you’d subtract $100 first, then another $6,000, leaving just $3,900 that could actually be deducted. Business property doesn’t follow those same rules—there’s no $100 rule or 10 percent threshold, which can make it easier to claim the full loss.
3. Can I use Form 4684 if I was reimbursed by insurance but not for the full amount?
Yes, and that’s a pretty common situation. If your insurance only covered part of your loss, you can still report the remaining amount that wasn’t reimbursed. You’ll need to document what you received from insurance and subtract that from the total value of what you lost. The difference is the portion that could qualify for a deduction, assuming you meet all the other requirements. Just remember that you can’t claim anything the insurance already covered.
4. What if the insurance company denies my claim—can I still report the loss?
Yes, you can still use Form 4684 to report the loss, even if the insurance company refuses to pay. However, it’s best to wait until you’re sure the claim is fully denied. The IRS wants to see that you’ve pursued all your reimbursement options before trying to deduct the loss. If there’s still a chance the insurance company might pay out later, you may need to delay reporting the loss or amend your return later if things change. Documentation is important here, especially letters or statements from your insurer explaining the denial.
5. Do I need to itemize my deductions to use Form 4684?
Yes, for personal-use property losses, you have to itemize to claim the deduction. That means filling out Schedule A instead of taking the standard deduction. If you normally take the standard deduction and the loss doesn’t push your itemized deductions above that threshold, you might not see any real tax benefit from using the form. However, if you’re reporting a loss related to business or rental property, that deduction goes on a different part of your tax return and doesn’t require itemizing.
6. Is there a deadline for submitting Form 4684?
Yes, the deadline is the same as your regular tax return. For most people, that means it’s due by April 15, unless you file for an extension. If you’ve had a loss late in the year and you’re still gathering estimates or waiting on insurance decisions, you might want to file for that extension to give yourself more time. Just be sure not to rush through the form—it’s better to take your time and do it right, especially when it involves complicated or emotionally difficult losses.
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