C2C Resources Releases End-of-Year Tip Sheet for Deducting Bad Business Debt

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As the end of the year approaches and businesses begin preparing their accounting books for tax season, C2C Resources releases top tips on the importance of deducting bad business debt.

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At the end of the year, when your accountant is preparing your books, make sure he or she notates the deductions that your business can take.

C2C Resources, a nationwide business debt collection agency, released today a tip sheet for deducting bad business debt, as businesses close their accounting books at the end of the year. The company believes that all businesses should assess their business debts early to create a less stressful tax season.

To claim a business debt as a deduction, business owners need to verify that their debt meets the following criteria: the business debt is a bona fide debt; the company has a basis in the debt; the debt is ordinary and necessary to the business; and the debt is uncollectable and a loss to the business.

“You can’t deduct a bad business debt unless you are already including the money in your business’s income,” explained Todd Tinkler, President of C2C Resources. “For small businesses who often do their books on a cash basis, you will not be able to deduct anything. When in doubt, always consult an expert when deciding which debts meet the criteria.”

For businesses that have business debt from past years, Tinkler advises businesses to take advantage of the amnesty period that the IRS offers businesses for seven years. If a deduction was not claimed on a worthless debt when it became uncollectable, the business has up to seven years to file an amended return to claim the deduction. By claiming the reduction, it also reduces the business’s taxable income. This will lower the amount of taxes that the business has to pay.

“At the end of the year, when your accountant is preparing your books, make sure he or she notates the deductions that your business can take,” said Tinkler.

About C2C Resources:
C2C Resources is a global Commercial Debt Collection agency headquartered in Atlanta, Georgia. The company collects commercial debt on behalf of their over 25,000 clients and is considered one of the top agencies in the country. The executive team at C2C brings more than 60 years of experience helping businesses collect their accounts receivable.

C2Cs powerful combination of Profit Maximizer, InfoMax Collection System, and Legal Forwarding Edge, can help your company be more effective with your own in-house collecting and maximize recovery of accounts turned over for collection.

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Trey Cefalu
C2C Resources
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