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There are a couple of ways that you may be able to take a deduction for auto damages. Please note that you can not take a deduction for loss that your insurance company compensates you for.

In other words, if you’re in a wreck and it causes $5,000 worth of damage to your card, and the insurance company pays you $5,000 you do not have a tax deduction. Your lost time, loss of use of the vehicle and/or pain and suffering are not tax deductions.

The loss could likely qualify as a casualty loss on your Itemized Deductions – Schedule A. It reports as a miscellaneous deduction, so there are limitations as to how much you can deduct.

If the vehicle is a company car, then all or part of the damages will be business deductions as well.

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