Claiming Bad Debts? You May Not Be Allowed To
Posted by admin on Apr 24, 2008
There are many items in business when you are left with providing a product or service and the buyer does not pay. Unfortunately, this is not always something that you can deduct off your taxes. The tax laws allow for some bad debt expenses to be written off, but it is specific to the type of product that you provide through your business.
If you sell tangible products such as goods from your store, then it is possible for you to deduct your bad debts through a deduction. On the other hand, if you sell services rather than products, you may not be able to claim this. The reasoning behind this is because it would be too easy for businesses to inflate the cost of how many bad debts they are incurring. Talk with your tax professional about methods to deduction that work the best here.