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support4
New Member

I paid a retainer to a consultant who never performed, and refuses to refund the retainer. Service business using cash method. How do I correctly classify this loss?

 
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Accepted Solutions
Coleen3
Intuit Alumni

I paid a retainer to a consultant who never performed, and refuses to refund the retainer. Service business using cash method. How do I correctly classify this loss?

Whether the consultant performed or not, you have an expense against income. Since you are cash method, you would merely record the expense. You can't deduct it twice such as an expense and a bad debt.

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Coleen3
Intuit Alumni

I paid a retainer to a consultant who never performed, and refuses to refund the retainer. Service business using cash method. How do I correctly classify this loss?

Whether the consultant performed or not, you have an expense against income. Since you are cash method, you would merely record the expense. You can't deduct it twice such as an expense and a bad debt.

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