Opening paragraph

If you missed a casualty or federally declared disaster loss on your original return, you can often claim it by filing Form 1040‑X and attaching Form 4684. The IRS limits personal casualty losses after the Tax Cuts and Jobs Act of 2017 to losses from federally declared disasters; business and income‑producing property losses follow different rules (IRS Pub. 547: https://www.irs.gov/publications/p547).

Step‑by‑step: What to file and attach

How to calculate the deductible loss

  1. Determine the lesser of:
  • Your adjusted basis in the property, or
  • The decrease in fair market value (FMV) caused by the event.
  1. Subtract any salvage value and insurance or other reimbursements actually received or expected.
  2. For personal property (non‑business) losses in non‑declared disasters, the loss generally is not deductible after TCJA; losses from federally declared disasters remain deductible (IRS Pub. 547).
  3. Apply any per‑loss limits (for personal use property the IRS applies a $100 per event floor and 10% of adjusted gross income rules when calculating personal casualty loss deductions on the original return year). See IRS Pub. 547 for specifics and worksheets.

Short example

  • Home value before disaster: $200,000
  • Value after damage: $80,000
  • Decrease in FMV: $120,000
  • Insurance received: $0 (or subtract actual insurance payment)
  • Deductible loss (simplified): $120,000 (subject to basis, personal loss limits, and AGI reduction rules).

Documentation checklist (what IRS examiners expect)

  • Date and location of the event (news reports, FEMA declaration, disaster number if applicable).
  • Photos and videos showing damage before and after.
  • Contractor estimates and receipts for temporary repairs.
  • Insurance claim file, claim number, and settlement documents.
  • Property value proof before the loss (appraisal, tax assessment, purchase contract).
  • Form 4684 calculations and copies of the originally filed return and the amended return (Form 1040‑X).

Timing and statute of limitations

  • File Form 1040‑X within the refund period: generally 3 years from the date you filed the original return or 2 years from the date you paid the tax, whichever is later. If you want to carry a disaster loss back (for qualified disasters), the rules and time periods can differ—confirm details with IRS guidance (https://www.irs.gov/).
  • Consider state filing requirements: some states require separate amended returns and have different deadlines; see related guidance on filing state amendments.

Common mistakes to avoid

  • Failing to include Form 4684 or detailed calculations with your 1040‑X.
  • Counting projected insurance proceeds instead of actual reimbursements.
  • Using an incorrect basis or failing to document pre‑loss FMV.
  • Assuming all personal casualty losses are deductible (post‑TCJA limits apply to non‑declared disasters).

Practical professional tips

  • Start a dedicated disaster file immediately after the event; contemporaneous records carry more weight in audits.
  • If you believe your original return year is the better year for the deduction (to offset higher income), consider filing an amended return for that year — consult the timing rules and carryback options for certain federally declared disasters (IRS Pub. 547).
  • For business losses, treat inventory and depreciable property under different tax rules; consider an accountant for complex calculations.

Interlinking resources on FinHelp

Authoritative sources and further reading

Professional disclaimer

This content is educational and does not substitute for personalized tax advice. Complex casualty claims and amended returns often benefit from a qualified tax professional or CPA review—if you file an amended return for a significant loss, consider getting professional help to avoid errors and ensure you meet IRS rules.