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Debt Relief – Insolvency – Bankruptcy Information » Bankruptcy Help » Company filed bankruptcy – do my unpaid invoices qualify for any tax breaks?

Company filed bankruptcy – do my unpaid invoices qualify for any tax breaks?

I was doing a bit of contract labor for a company who filed bankruptcy October 31st, 2008. Unfortunately, I have roughly $6,000 of unpaid invoices for services I provided to this company. Obviously, I will try and collect on these invoices using the bankruptcy courts proof of claim form (but understand that I will probably never see the $$).

Can I claim these losses on my income taxes?

Help smart people! :) Thanks!
I appreciate the feedback!

I am already listed as a creditor on the bankruptcy filing. Although, I do understand that the chances of me being paid are slim…

Long story short, I don’t really own my own business – I am a former employee who returned to work for this company on an hourly basis. (And yes, there were no taxes witheld from any of the invoices paid to me – so I will not owe taxes on the money for which I was unpaid.)

Just to clarify, I have roughly $1,000 worth of travel / lodging / rental car expenses that were built into those unpaid invoices – should I be able to deduct those expenses from my taxes?

Thanks so much for your help! Obviously, I will never work as a contract employee again – lesson learned the hard way!

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2 Responses to "Company filed bankruptcy – do my unpaid invoices qualify for any tax breaks?"

  1. AJ says:
    Talk to a lawyer immediately, because you need to get involved in this bankruptcy to get attached as a creditor so you can get paid.
  2. shiprepairwoman says:
    No you are probably a cash basis accounting for your business so you haven’t paid taxes on the income. You can still deduct expenses but not write off the bad debt. If you accrue income you can write off bad debt. If you collect it will be income and your cost to collect an expense.

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