If I had a customer that did not pay me for my services, and I had to pay for labor and materials out of pocket . where do I put the loss at

[Marketstar · Accepted solution]

Unfortunately, the IRS does not allow a deduction or credit for income not received..

You would not make a manual entry for the loss, but you can claim your expenses.

What category you cliam the expenses depends on what specific expenses you incurred.

See Schedule C https://www.irs.gov/pub/irs-pdf/f1040sc.pdf to determine the category(ies) you would use.