<topic sku="biz" tNum="288488" author="sallyh" xmlns="x-schema:hhTopicSchema.xml"><index><title>Learn about deducting business bad debts</title><category></category><klink type="cncpt">Tell me about deducting business bad debts</klink></index>
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<p>A bad debt is an amount someone owes you that you cannot collect. Debts from operating your trade or business are generally business bad debts and are deductible as business expenses to the extent that you included the income in a previous year for tax purposes. You cannot deduct bad debts on business receipts that you have not recorded as taxable income. For more information, see IRS Publication 535, Business Expenses, Chapter 14, on the <alink type="xtnl" href="http://www.irs.gov">IRS Web site</alink>.</p>