The Disaster Tax Relief and Airport and Airway Extension Act of 2017 includes favorable rules for many personal casualty losses from Hurricanes Harvey, Irma, and Maria. Under the Act, you can deduct these losses whether you itemize other deductions on Schedule A or not. Moreover, your net casualty loss from these hurricanes does not need to exceed 10% of your adjusted gross income to qualify for the deduction. However, the $100 threshold limit per casualty is increased to $500.
You may be able to take many personal casualty losses from Hurricane Harvey, Irma, or Maria into account on your 2016 tax return instead of your 2017 tax return. Generally, you can elect to deduct a loss from a federally declared disaster in the tax year immediately before the tax year in which the loss was sustained by claiming your disaster loss on your original or amended return for the earlier year no later than 6 months after the due date for filing your original return (without extensions) for the year of the disaster. You can make the election to deduct these losses on your amended 2016 return on or before October 15, 2018. If you previously got a 6-month extension of time to file your original 2016 return and you are an affected taxpayer for purposes of Hurricanes Harvey, Irma, or Maria, you have until January 31, 2018 to timely file and make this election. See IRS.gov DisasterTaxRelief for more information on which taxpayers have been granted additional time to file through Jan. 31, 2018. For more information on disaster assistance and emergency relief for individuals, see IRS.gov/DisasterRelief.
The 2016 Form 4684 and Instructions for Form 4684 are now posted at IRS.gov/Form4684. They have been updated to include calculations and other information specific to losses from Hurricanes Harvey, Irma, and Maria.