Can I deduct unpaid invoices? 

Lisa Marie Brugman, EA

Published on: 16/02/2026

Can you deduct unpaid invoices? It depends on your accounting method. Cash-basis businesses generally can’t deduct income they never received, while accrual-based businesses may qualify for a bad debt deduction—if the debt is truly worthless and properly documented. This guide explains the difference so you can avoid mistakes and stay compliant.