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Income Tax Questions

A car accident can be costly, see if you can recoup some of your losses on your taxes.

If you were in a car accident last year, you might have some income tax questions you should be asking. According to the IRS there are a few instances where having a car accident can impact your income tax return.

Deductible losses - Losses from a car accident are casualty losses and are either “deductible” or “nondeductible” casualty losses. Nondeductible loss cannot be claimed if the accident occurred because of your own willful or negligent action, or if someone else’s negligence or willful action caused the accident when they were acting on your behalf.

How to report – Use Form 4684 first and then Schedule A (Form 1040).

Visit the IRS site or consult your accountant or tax preparer with your car accident income tax questions to determine how to figure the loss. You can also learn about “decrease in Fair Market Value” and Car Value by visiting the IRS site.

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