A consulting client did not pay me $2,000 owed to me last year. Is there somewhere to claim uncollectable consulting fees as a deduction on my taxes?

[Rachel_W · Accepted solution]

Unfortunately, uncollectible consulting fees are not a deduction on your Tax Return, you will just have less taxable income.

Unless you chose to use the Accrual Basis of Accounting (Most small businesses use the Cash Basis of Accounting) and reported the consulting fees as income in a prior year, you aren't allowed a deduction since the fees were never included as income.