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amanda1
New Member

I was not paid by 2 clients full last year. Can I deduct that as lost income?

One invoice was not paid in full and the other was not paid for services rendered.
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I was not paid by 2 clients full last year. Can I deduct that as lost income?

Not usually.  You could only deduct it as a loss (or reduction to income) if you had previously reported it as income.  This is rare. 

Most sole proprietors report income on a Cash Basis.  This means that income and expenses are reported when they actually received it.  Therefore, if you didn't get paid, you simply don't include it in your income

Unfortunately, the value of your time spent is never a deduction.  If you had actual out-of-pocket expenses related to those clients, those expenses are deducted as you normally would if they are ordinary and necessary business expenses.

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1 Reply

I was not paid by 2 clients full last year. Can I deduct that as lost income?

Not usually.  You could only deduct it as a loss (or reduction to income) if you had previously reported it as income.  This is rare. 

Most sole proprietors report income on a Cash Basis.  This means that income and expenses are reported when they actually received it.  Therefore, if you didn't get paid, you simply don't include it in your income

Unfortunately, the value of your time spent is never a deduction.  If you had actual out-of-pocket expenses related to those clients, those expenses are deducted as you normally would if they are ordinary and necessary business expenses.

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