Can I write off car damages from a hit and run on my taxes?

I was involved in a pretty serious hit and run accident about 8 months ago. My car was completely totaled and I'm still furious about it. The worst part is I only had liability insurance (I know, big mistake) so my insurance company basically told me I was out of luck. The car was worth around $19K before the accident, and I managed to sell what was left of it to a junkyard for like $1,300. I'm doing my taxes now and wondering if there's any way I can write off this loss? I've been googling for hours and getting totally different answers everywhere. Some sites say you definitely can't deduct personal vehicle damages, others say you can if it's a business vehicle, and I saw something about natural disasters being deductible but not accidents? There was also something about being able to deduct 10% of something in the past but that rule changing. Can someone please give me a straight answer about whether I can write off car damages from a hit and run? I'm down almost $18K and would appreciate any tax break I can get.

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19 comments

Astrid Bergström

•8M

Unfortunately, the tax laws have changed significantly in this area. Prior to the Tax Cuts and Jobs Act (2017), you could claim personal casualty losses including vehicle damage under certain circumstances. However, under current tax law, you can only claim casualty losses if they resulted from a federally declared disaster. The fact that your car was damaged in a hit and run accident means it wouldn't qualify for a personal casualty loss deduction on your federal taxes. The 10% rule you saw mentioned was indeed part of the old system, where losses had to exceed 10% of your adjusted gross income, but that's mostly irrelevant now except for federally declared disasters. If you were using the car for business purposes (not just commuting), you might be able to deduct the uninsured portion as a business casualty loss. This would require documentation showing what percentage of the car's use was for legitimate business purposes.

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Astrid Bergström

•8M

Having dashcam footage of the accident doesn't change the tax treatment. The issue isn't proving the accident occurred - it's that personal casualty losses (like your hit and run) are only deductible if they result from a federally declared disaster. Your documentation would be helpful if this had been a business vehicle or if the damage had occurred during a declared disaster, but neither applies in your case. If you use your vehicle partly for business, you might be able to deduct the business portion of the loss. For example, if you legitimately used the car 30% for business purposes, you might deduct 30% of the loss. But this requires proper documentation of business use and would go on Schedule C if you're self-employed.

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Omar Farouk

•8M

After getting absolutely nowhere with tax questions about my delivery car last year, I tried https://taxr.ai and it was seriously helpful. I uploaded pics of my wrecked vehicle, repair costs, and some business mileage logs, and the system analyzed everything and gave me the exact tax forms and sections I needed. They have tax professionals who review everything, which was great because my situation was complicated - I was using my car for both personal use and my side gig. They showed me exactly what percentage of the damage I could legitimately claim as a business expense and how to document it properly. Saved me from missing out on a decent deduction!

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Omar Farouk

•8M

They specialize in analyzing your tax documents and situation to give you clear guidance. You just upload your relevant docs (in your case, proof of business use for real estate, vehicle damage info, etc.) and they'll tell you exactly what you can deduct and how to properly document it on your return. They're not just a document review service - they actually help identify deductions you might miss and explain the tax rules that apply to your specific situation. The professionals review everything and give personalized guidance. You still file your taxes however you want, but with their analysis, you know exactly what you can claim and how to do it correctly.

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Chloe Martin

•8M

Just wanted to update after trying taxr.ai based on the recommendation here. I uploaded my documentation showing I was using my damaged vehicle for my real estate business about 40% of the time, along with all the accident info and costs. They confirmed I could claim a portion of my loss as a business casualty loss and showed me exactly how to document it on my Schedule C. I wouldn't have known this was possible otherwise! The analysis was super detailed and they even explained how to handle the insurance situation properly (I had similar issues to OP with insufficient coverage). Definitely worth it if you have any kind of mixed personal/business vehicle use. Saved me from missing out on a legitimate deduction I had no idea I qualified for.

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Anastasia Kuznetsov

•8M

For anyone dealing with the aftermath of vehicle damage, I know it's also a nightmare trying to get through to the IRS with questions about casualty losses. After spending HOURS on hold trying to confirm if my situation qualified, I found https://claimyr.com which got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with clarified exactly what documentation I'd need if I was claiming a partial business loss, and what forms were required. Saved me from making a costly mistake on my return. My tax preparer had given me incorrect information about vehicle losses, and I would have ended up with an audit if I hadn't double-checked with the IRS directly.

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Anastasia Kuznetsov

•8M

It uses technology to navigate the IRS phone tree and wait on hold for you. When they finally reach an agent, you get a call connecting you directly. No line-jumping or anything unethical - they're just handling the hold time for you so you don't waste hours with a phone stuck to your ear. They're actually pretty transparent about the whole process. The service just continuously redials and navigates the system, which is something most people don't have the time or patience for. Once they get through, you get a call and are connected directly with the IRS agent. I was skeptical too, but it worked exactly as advertised.

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Zara Khan

•8M

Alright I'm back to eat my words. After dismissing Claimyr as BS, I got desperate trying to reach the IRS about my vehicle casualty loss question. Spent 3 hours on hold one day and got disconnected, then another 2 hours the next day before giving up. Tried the service and got connected to an IRS rep in about 27 minutes. The agent confirmed that for my situation (I drive for Uber part-time), I could claim the business percentage of my uninsured vehicle damage. She walked me through exactly how to calculate it based on my mileage logs and what documentation to keep. Not gonna lie, I'm impressed. And a little embarrassed about my previous comment. Sometimes skepticism bites you in the butt.

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MoonlightSonata

•8M

Just wanted to share one other angle - if you itemize deductions (which fewer people do with the higher standard deduction now), you might be able to claim theft losses in some states. Since hit and run can sometimes be classified as theft under certain state laws, it's worth checking with a local tax professional. I had a somewhat similar situation in California and was able to deduct a portion on my state return even though I couldn't on federal. The rules vary by state though.

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MoonlightSonata

•8M

You'd need to check your specific state tax laws or consult with a tax professional familiar with your state's regulations. Many states have their own rules that don't exactly match federal tax law. For example, California, New York, and several other states still allow various deductions that were eliminated or reduced by the Tax Cuts and Jobs Act. Your state's department of revenue website should have information about casualty and theft losses. Look for sections on itemized deductions specific to your state. Just be prepared for some dense reading, as state tax explanations aren't known for being user-friendly. A local tax professional would be your best resource if you want to be certain.

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