Write-Off Bad Business Debts On Your Taxes
Write-Off Bad Business Debts On Your Taxes Practically every small business has receivables that it cannot obtain from clients. If your small business doesn’t have any such receivables, consider yourself lucky. For those small businesses that suffer from uncollected receivables, solace can be taken from the fact you can claim a tax deduction. Bad Debt Tax Deduction A small business can write-off bad debt losses if it meets nominal requirements. To claim such a tax deduction, the following must be shown: A. The existence of a legal relationship between the small business and debtor; B. The receivables are worthless; and...