Business & farm

If you loan money to a client, supplier, employee, or distributor for a business reason and you’re unable to collect the loan after attempting to do so, you have a business bad debt, which can be entered as an expense of the business.

To enter the bad debt in TurboTax, please follow these steps in your return:

TurboTax Self-Employed (Online)

1. Click on Income & Expenses and then click the Start/Revisit box in the Self-Employment section.
2. Click Review next to your business.
3. On the Here's your [business] info screen, click on the box Add expenses for this work.
4. On the Tell us about any expenses screen, mark the box next to Other Miscellaneous Expenses and click Continue at the bottom of the screen.
5. On the next screen, enter information on the bad debt.   

TurboTax Home& Business (CD/Download)

1. Click on the Business tab  > Continue > I'll choose what I work on
2. On the Let's gather your [business] info screen, click the Start/Update button next to Business Income and Expenses.
3. On the screen, Let’s gather your business info, in the Business Income and Expenses section, click the Start/Update button. 
4. Continue to the Here's the business info we have so far screen.  Click on the Edit box next to the business. 
5. On the Your [business type] Business screen, in the Business Expenses section, click the Start/Update box next to Other Common Business Expenses
6. Click Start/Update box next to Other Miscellaneous Expenses.
7. Enter the information on the next screen.