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issue :.
In 2013, I worked for a startup and was paid as a contractor. In 2014, I worked for the same company. They ended up going bankrupt and never paid me the last 1.5 months of wages due. They likely will not be sending a 1099-MISC. January-February I was paid $ 4000, while from March to April, I am not paid, but I'm due to pay $ 4,0. Since then, I moved states for new jobs. August to December 2014, I work at a new company and received a W-2. When I get my W-2 information, he said I'm about $ 2.800 Federal return and $ 0 from the state. I added the $ 4,000 income in Schedule C and now he says I'm $ 1,0 federal and $ 350 from the state.
Is it possible to count the unpaid wages of $ 4,0 as a loss and return more money?
answer
If you are a taxpayer cash method (most people are), you must include the wages you actually received during 2014 income.
Unpaid wages are not included as income, and you can not deduct either.
you generally can not take a deduction for the amount due to you that you never included as income.
If you do not receive a 1099-MISC form in mid-February and you think you should be issued one, contact the employer (payer).
you can call the IRS at 800-829-1040.
Whether you receive a 1099-MISC form, you must declare the appropriate amount of income on your tax return.
as an independent contractor or self-employed, your income will be reported on IRS Schedule C -. Net income from business (with your Form 1040)
to enter or review the information for your business in TaxACT:
- Click the federal Q and TaxACT tab in
- Click "business income" to expand the category, and then click "corporate income or loss of a sole proprietorship"
- Click "Add "to create a new copy of the form or the review to examine a previously created form and follow the instructions step by step
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