When I can take a bad debt deduction on my tax return?
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byron
Apprentice
Joined: 08 Feb 2005
Posts: 9
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 Posted: 03/12/11 - 09:50 Post subject: |
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| Running any kind of investment is never easy, and part of it is making a sound financial plan. Now, knowing about taxes you need to pay is equally important. Simply put, it is the main corner stone of your business planning, as it is the only real necessary cost you always have to pay, and from which deduction you may profit. Generally, any debt that someone owes to you, be it business or non business is a bad debt, and when it is of a former sort, you can legally take a deduction. |
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kermie1858
Apprentice
Joined: 11 Aug 2010
Posts: 3
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| Posted: 03/27/11 - 05:05 Post subject: |
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| The income you have that is taxable is then calculated when you subtract from your gross income these deductibles. One of these deductibles are bad debts. In order to fulfill the appropriate procedure, you should state this debt as a capital loss of a short term type. The proper form is 1040, and that is where you will be able to state what is required. For more info, you may go to http://www.irs.gov/taxtopics/tc453.html. |
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el
Apprentice
Joined: 24 Jul 2005
Posts: 3
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| Posted: 04/11/11 - 00:20 Post subject: |
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| Bad debts are definitely one of the least unwanted categories, even if you can deduct them from your return. Mainly that is because there debts are more or less definite and that means you have to go through very complicated means in order to make your debt payable. Deduction is a certain relief, but it is only a temporary one. I hope everything will work out for you in that sens. Best of luck. |
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