Every year, severe storms, flooding, wildfires and other disasters affect millions of taxpayers. Many experience casualty losses from damage to their homes or personal property. The One Big Beautiful Bill Act (OBBBA), signed into law last year, generally made permanent the Tax Cuts and Jobs Act (TCJA) limitation on the personal casualty loss tax deduction. But it also expanded the deduction in one way. What’s deductible For losses incurred from 2018 through 2025, the TCJA generally restricted deductions for personal casualty losses to those due to federally declared disasters. This is the rule that applies to your 2025 income tax return due April 15, 2026. (Before the TCJA, personal casualty losses were also potentially deductible if due to various other types of incidents, such as theft,...

In recent weeks, some Americans have been victimized by hurricanes, severe storms, flooding, wildfires and other disasters. No matter where you live, unexpected disasters may cause damage to your home or personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But there are now restrictions that make these casualty loss tax deductions harder to take. What’s considered a casualty for tax purposes? It’s a sudden, unexpected or unusual event, such as a hurricane, tornado, flood, earthquake, fire, act of vandalism or a terrorist attack. More difficult to qualify  For losses incurred through 2025, the TCJA generally eliminates deductions for personal casualty losses, except for losses due to federally declared disasters. For example, during the summer...