I have performed services for a client, invoiced them, and claimed income under the accrual method. However, they have never paid. Can this be deducted? If so, when?

[Vanessa · Accepted solution]

If you used the accrual method and previously paid taxes on the income but never received it, yes, you can then deduct it when you are sure you will not receive the income. If you end up collecting the income, it will then need to be included in income when you would file your next return after receiving it. 

If you did not include this in your taxable income in a past year and did not pay taxes on it already, you would not be able to deduct it.  You would simply not include it in your income. 

If you are listing it as income on your return in the current year you can then include the amount not received as a bad debt for the current year.