How to calculate Casualty Loss deduction on IRS Form 4684 for hurricane roof damage - federally declared disaster

The casualty loss deduction for federally declared disasters can be tricky, but I can help walk you through this. For Form 4684, you're right that you need to determine the decrease in fair market value (FMV) of your property. The repair cost ($27k) is actually a good starting point to estimate the decrease in FMV, but the IRS doesn't automatically accept repair costs as the exact measure of your loss. A better approach is to get a professional appraisal of your property's value before and after the damage, but since that might be expensive, using your repair costs as an estimate is reasonable in this case. Just be prepared to justify this if questioned. The IRS typically expects the decrease in FMV to be supported by some form of documentation. For claiming the deduction, you generally must claim it in the year the loss occurred, but for federally declared disasters, you have the option to claim it either in the year the disaster occurred OR on the previous year's return (which might get you a refund faster). You can't spread it across multiple years as you described.

After struggling with a similar roof damage issue from Hurricane Ian, I found an amazing tool called taxr.ai (https://taxr.ai) that really helped me navigate the Form 4684 casualty loss deduction. I was totally confused about how to document everything properly, especially since I had never claimed a disaster loss before. The platform analyzed my repair receipts and damage photos and helped me calculate the exact deduction amount based on IRS guidelines. It also explained exactly how to complete each section of Form 4684 and what supporting documentation I needed to keep in case of an audit. Saved me hours of research and probably prevented me from making mistakes that could have triggered an audit.

I was initially skeptical about taxr.ai but decided to try it after struggling with my hurricane damage deduction. It actually was a game-changer! The system confirmed my address was in the federally declared disaster zone and walked me through exactly how to calculate the fair market value reduction for my Form 4684. It even pointed out that I could deduct some related expenses I hadn't considered - like the generator I bought during power outages and some cleanup costs. The step-by-step guidance for completing Form 4684 was super clear, and it created a PDF with all my documentation organized in case I get audited. Ended up with about $8,000 more in deductions than I initially thought I'd qualify for!

If you're still having trouble getting clear answers about your casualty loss deduction, you might want to try contacting the IRS directly through Claimyr (https://claimyr.com). I was in a similar situation after Hurricane Nicole hit Florida - had roof damage, no insurance, and wasn't sure how to claim it properly on Form 4684. I spent weeks trying to get through to the IRS on my own with no luck - always on hold for hours only to get disconnected. Claimyr got me connected to an actual IRS agent in about 15 minutes who walked me through the entire process. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent confirmed I could use my repair costs as a reasonable estimate of value decrease and explained exactly how to document everything to avoid any issues.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to talk to someone at the IRS about my hurricane damage claim. I was honestly shocked when I got a call back in about 20 minutes connecting me to an actual IRS representative. The agent was incredibly helpful with my Form 4684 questions. They confirmed that using the repair cost as an estimate for decreased property value was acceptable as long as I had documentation. They also explained that for federally declared disasters, I could claim the loss either this year or retroactively on last year's return (which I ended up doing to get my refund faster). Would have never figured this out on my own after weeks of trying to reach someone!

Just a heads up on Form 4684 and casualty losses - there's a $100 floor per event, and more importantly, a 10% of AGI reduction that applies. So with your $110k income, you're looking at an AGI of roughly $110k, meaning the first $11k of your loss won't be deductible. So from your $27k roof repair, you'd likely only be able to deduct around $16k (after both the $100 and 10% AGI reductions). Also, you can't spread this deduction across multiple years. You either take it in the year it happened or, because it's a federally declared disaster, you can claim it on the previous year's taxes by filing an amended return.

Does anyone know if having homeowners insurance but choosing not to file a claim (because of deductible or fear of rate increases) affects the casualty loss deduction? I'm in a similar situation with hurricane damage but technically had insurance.

I went through something very similar after Hurricane Ian damaged my roof. A few things that might help based on my experience: First, you absolutely need to document everything now if you haven't already. Take photos of any remaining damage, keep ALL receipts from the roofing company, and try to get written estimates from contractors (even if you've already done the repairs). The IRS will want to see proof that the damage was specifically from the federally declared disaster. For the fair market value calculation, using your repair costs as a baseline is reasonable, but consider getting at least one professional estimate of what your home's value decrease was. Some insurance adjusters will do this for a fee even if you're not filing a claim, and it gives you more credible documentation. One thing that caught me off guard - make sure you're claiming this in the right tax year. Since it was a federally declared disaster, you can choose to claim it on last year's return (by amending) or this year's return. If your income was lower last year, that might give you a better deduction after the 10% AGI reduction. Also, don't forget about related expenses like temporary repairs, tarps, or cleanup costs - these can sometimes be included in your casualty loss calculation too.

Based on your situation, here are a few key points that might help with your Form 4684: Since you mentioned you've never filed a tax return before, you'll want to be extra careful with documentation. The IRS tends to scrutinize first-time filers more closely, especially for significant deductions like casualty losses. For the fair market value calculation, your $27k repair cost is actually a solid starting point. The IRS Publication 547 specifically mentions that repair costs can be used as evidence of decreased fair market value, as long as the repairs only restore the property to its pre-damage condition (which sounds like your case with the roof). One important thing others haven't mentioned - make sure you get a copy of the official FEMA disaster declaration for your area. You'll need the disaster declaration number for your Form 4684, and having this documentation helps establish that your loss qualifies for the special disaster provisions. Also, since your income is $110k, definitely run the numbers on claiming this loss on your 2023 return (amended) versus your 2024 return. If your 2023 income was lower, the 10% AGI threshold would be smaller, potentially giving you a larger deduction. Don't forget to keep detailed records of everything - the IRS has up to 3 years to audit casualty loss claims, and disaster-related deductions sometimes get extra scrutiny.