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Bad Debt
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Hello,

Seeking some guidance. I am not an accountant, nor am I involved in any accounting practices. I am supporting a business that has been newly acquired, and we have found a significant back-log of of non-payment by customers to the tune of well over $1M. Some of these debts date back to 5/2020.

Questions:

Do non-payments, bad dept, need to be reported within the same tax reporting year that the invoicing was noted in revenue?

If not, are there time limitations on when a business can deduct a bad debt from the P&L or Schedule C?

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1 year ago