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posted Mar 31, 2025 11:18:44 AM

Deduction for services paid to contractor who did not complete the work

I had a contractor that did not complete work that I had paid for.  I went through small claims court and was awarded payment for the services not completed in 2023 but the contractor never made any payment and filed bankruptcy in 2024.   Where on the 1040 tax form can I claim this deduction?

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Expert Alumni
Mar 31, 2025 11:23:18 AM

This will be a non business bad debt.  To enter it select the following:

  1. Deductions and Credits
  2. Non Business Bad Debt under Other Deductions and Credits

How to Report Non-Business Bad Debt on a Tax Return