My employer filed bankruptcy and owes my $12,852. Can I write that off on my taxes?
2006-08-14 20:27:56 · 10 answers · asked by Cris K 2 in Business & Finance ➔ Taxes ➔ United States
This is a good question because this is a loss to you. Is this a loss recognized by the IRS?
F4684 is the 'Casualties and Thefts' Form... * I am now researching the IRS def. of casualty.
The Pub # is 584 which has workbook for disaster records.
Give me a couple days or maybe another tax person can quote a page or 2!
I will find a way. Stand By...
OK I found out last night from my H&R instructor.
.You can only claim a loss on tax paid money or the money or posession that you have paid fed taxes on.
.If you have a W2 then yes is the answer.
.if no W2 and you have contact with the old boss then maybe you could claim a loss of investment if you were going in to be partners with your old boss.
Sorry but you must have agreed to work for no pay, promises do not count as money.
good luck.
2006-08-15 10:37:07 · answer #1 · answered by awaken_now 5 · 0⤊ 0⤋
Compare your W-2 annual wage statement with the wages that you were paid.
If the W-2 does not include the unpaid wages, then report the W-2 amount. You will be taxed only on the amount of wages you actually received.
If the W-2 DOES include the unpaid wages, you have two choices. (1) Ask the employer to issue a corrected W-2. The instructions to Form 1040 state that you employer is required to issue a corrected W-2. (2) If the employer is not around to issue a corrected W-2 and the W-2 includes the unpaid wages, file a claim with your state for the unpaid wages. When you file your tax return, attach a statement to you return that shows the W-2 wage amount, the the unpaid wages and the net amount. Report the net as wages. Also, attach the claim for unpaid wages that you filed with the state as evidence of your reduction of wages on your return. Make sure that you deduct any withholding taxes related to the unpaid wages as they have likely not been remitted to the IRS or your state.
2006-08-15 02:26:53 · answer #2 · answered by TaxMan 3 · 0⤊ 0⤋
Your Employer may still be responsible for paying you. It really depends on what type of bankruptcy he has filed. You need to find out(this is public record-free!!)and make sure you are listed as one of his debtors.
As for taxes, yes you can claim this as a loss, but you will have to request a form/schedule from the IRS to do so. Keep in mind that you will have to file a 1040, and itemize your losses.
Good Luck!!
2006-08-14 20:37:11 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Consult a TAX ATTORNEY...and while you're at it ask him if he can find out if it's a way that you can get paid, anyway by your company.
Usually the Creditors, and people owed, are notified upon a person in debt, filing for Bankruptcy and it's got to be a way for you to recover at least some of your money. Check with the Attorney concerning your rights to collect under the, "Labor Law", maybe you can oppose your name being added to the list.
You just might have to go to court yourself with your Attorney to oppose.
2006-08-14 21:01:54 · answer #4 · answered by Vera W 3 · 0⤊ 0⤋
No, you can't. You can't write it off because you never added it to your income. As a cash basis taxpayer, you claim income as you receive it. If you had claimed it as income previously (as an accrual basis taxpayer), you could claim it as a bad debt, but that's not likely for that situation. If it was reported incorrectly on your W-2 then you can contest the amount, but you need to let the IRS know why you are contesting the amount on your W-2.
Pretty much, your only option is to take him to court. I don't think bankruptcy gets you out of paying employees.
2006-08-14 21:53:17 · answer #5 · answered by questionsbyq 1 · 0⤊ 0⤋
If you included the amount in income, then you should be able to deduct the bad debt. However, most people report income on the cash basis, so if you did not receive these wages they should not have been included in your income in the first place. If they were not included in income, you are not entitled to a deduction.
Any amount that you eventually collect will be income to you at that time.
2006-08-15 04:56:07 · answer #6 · answered by TaxGuru 4 · 0⤊ 0⤋
NO, you must file with the W-2s you are sent and the income from any 1099's recieved.....or the w2s and gross wages from self employment. I do taxes for a living so email me if you need to witchtwo_2000@yahoo.com
2006-08-14 20:32:32 · answer #7 · answered by WitchTwo 6 · 0⤊ 0⤋
And the same question pops up again
2016-08-23 04:22:40 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Yes, but you have to be able to prove it.
2006-08-14 20:29:25 · answer #9 · answered by EMAILSKIP 6 · 0⤊ 0⤋
I doubt this is feasible
2016-08-08 12:32:40 · answer #10 · answered by ? 3 · 0⤊ 0⤋