Can You Claim A Broken Windshield As A Tax Deduction?
If your car's windows or windshield suffers damage in a storm, your insurance may not cover it. If that's the case, you might be interested in learning that the Internal Revenue Service allows for certain casualty losses to be claimed as tax deductions. However, you'll need to meet specific criteria to qualify for the write-off.
What you can claim
The IRS allows taxpayers to deduct casualty, disaster and theft losses related to their vehicles, but only for what's not covered by insurance. To qualify as a casualty loss, the damage to your car has to have been caused by an unexpected or unusual event like a flood or hurricane. Damage by vandalism also qualifies as unexpected and unusual. You can't deduct ordinary wear and tear as a casualty loss.
To claim a casualty loss as a deduction, you typically have to file in the same year that the damage occurred. The exception to that is if the damage was the result of an event that was declared a federal disaster; the president makes this declaration to qualify the disaster area as eligible for federal assistance.
What you need to prove
To claim damage to your car as a federal income tax deduction, you have to be able to prove that you're the owner of the car, and also be prepared to show evidence that your car was damaged and proof of how much the damage cost you. Additionally, you must inform the IRS of any reimbursement you're likely to receive from an insurance company. Be sure to reduce the amount you're claiming by the sum of the anticipated reimbursement.
How to claim the deduction
To claim casualty losses to your car on your tax return, list each item that was damaged or destroyed in the course of the unexpected and unusual event as an itemized deduction on IRS Form 4684. Combine the amounts of all items to come up with a total number. To find out how much, if any, of a deduction you qualify for, you have to:
- Subtract $100 from the total amount
- Subtract 10 percent of your gross income from that total amount
Whatever's left over is the amount that you can claim.
As you can see, the amount you can deduct depends on the cost of the damage and how much money you earn in a year. If the damage was minor, it might not be deductible. However, it's worth investigating possible tax savings any time you have damage to your car that's not your fault and not covered by insurance. Click here to learn more about auto glass replacement.