Can I take a loss on an unpaid invoice?

[AK JayDub]

I provided consulting services and billed the client. Before paying the invoice the client suffered a serious health issue and didn't pay the invoice, a little over $9k. How do I write that off as a loss?

[ee-ea]

You have written it off. The 9k is not in income but the expenses incurred are been deducted.

[VolvoGirl]

No.  Not unless you already included it as income first.  You can't deduct income you never received.  You will just have less income to be taxed on.  You take the loss by still deducting all your expenses but not your time or labor.

Per IRS Publication 535 Business Expenses, see the caution on top of page 42, it says.........

You can claim a bad debt deduction only if the amount owed to you was previously included in gross income.  This includes amounts owed to you from all sources of taxable income, including sales, services, rents and interest.

http://www.irs.gov/pub/irs-pdf/p535.pdf

[ThankGod4]

I think, the first response is the most correct answer you will get.  However, I am still thinking.

[VolvoGirl]

Both answers are the same.  You can't deduct it.