06/24/2026
Wish the answer were a simple "yes." But the truth is — it depends. And knowing the difference could save you from a costly mistake with the IRS.
Here's the real breakdown:
What can generally be deducted:
→ If you had to hire someone else to finish or fix the job, that extra cost is considered an ordinary and necessary business expense — and yes, it's deductible.
→ If the subcontractor owed you money and went bankrupt without paying you back, that may qualify as a bad debt with the IRS — but it has its own specific claiming process.
What's not so straightforward:
→ If the work was just poor quality but still got done, that loss alone doesn't automatically give you a deduction.
→ If the subcontractor took your money and disappeared, you can't just assume it's a write-off — the IRS has very specific rules for that situation.
The line between what qualifies and what doesn't is thinner than most people think. And reporting it wrong can turn an already bad situation into an even bigger headache.
If this happened to you this year, reach out before tax season hits. Let's look at your specific situation together and figure out what actually applies.
📞 (845) 863-9564
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🌐 www.micasabusiness.com
