Losses

[Blackcat31]

What do you do with money that is owed to you and you were unable to collect it. I have a family that left with a large balance and I tried collecting without going to small claims court but have had no luck. The amount is under $300. Someone told me we can not write-off losses on our taxes from money never paid to us...are they correct?

I am now pre-pay so the problem will not come up again but what do I do with this amount still owed and will likely never get?

[care-care]

I believe you dont count it as income so there fore you wont be paying taxes on it then .. but i am sure Tom will answer

[Abigail]

care-care is correct. You should NOT claim that as income and you don't claim it as a loss. A loss is when you don't make any money at all because expenses were more than income earned and since this wasn't paid to you even though you were expecting it it's not an expense either. I would file for small claims giving a one-week notice if not paid in FULL.

[lil angels]

I had a family that left like that and I wrote them a letter and told them they needed to pay it (even if it was $25 a week)or they would see me in court Plus I would try to get court fees and they days pay that I have to close to go to court. I had no intentions of really going to court but I didn't think it mattered I still said it. They called within 2 days and gave me $50 a week till it was paid. their balance was around 300 also.

[TomCopeland]

Loss vs. Refund

care-care is correct. You should NOT claim that as income and you don't claim it as a loss. A loss is when you don't make any money at all because expenses were more than income earned and since this wasn't paid to you even though you were expecting it it's not an expense either. I would file for small claims giving a one-week notice if not paid in FULL.

Correct. Don't count money you didn't get as a deduction. As a result you will pay less in taxes than if you had collected it.

[Blackcat31]

Correct. Don't count money you didn't get as a deduction. As a result you will pay less in taxes than if you had collected it.

Okay, so technically the bill was $330 (two weeks of care)and then I added $70 for late fees (two weeks @ $5 per day) before I just stopped and realized it was a lost cause and was never going to see a penny from them. What is the amount I can not claim from my income then? Just the actual bill amount or late fees too? Thank you!

[Childminder]

You can't count any of it as income or loss cause it never crossed your palm. If you go to small claims court and try to collect you can count on the court fees as a LOSS on your taxes but can not count what you didn't get. When and if you do get the money you can claim it as income for the year in which you actually get it.

[Blackcat31]

Good thing I hire someone to do my taxes for me!! LOL!! I just reread everything and get it now....guess that is what happens when I write but do not comprehend. Thanks...