My previous employer failed to pay me over $5K for salary, which was awarded to me in small claims court. However, it was still never paid by him or his company. Can I claim this on my taxes?

I could tell you different but this loss is not likely to be deductible.  It would only be deductible if your previous employer gave you a W-2 that included the amount he didn’t pay you.  However if you don’t report the income, you don’t get to deduct the loss.  This is always hard to understand so here is an example.  You work for this sleeze bag and earn $100.  Sleeze bag only pays you $50 so you report the $50 income.  Now you think wait a minute I lost $50 I want to deduct that so now you are reporting no income?  That doesn’t work because you really made $50.  Of course, if you report the $100 for some reason you get the deduction.  Not such good news I am sure. 

Here’s something better I hope and I hope it is not too late.  Looks like you are in CA so I would call and talk to the Employment Development Department.  Going to small claims was a good idea but EDD has more teeth when it comes to collecting.  Don’t know when this happened and if they have time limits but I do know that if you were an employee and they accept your case they will squeeze that SB hard to get your $$.   At least when I was young and not so smart I represented a client at a hearing with EDD.  The SB I was representing was willing to pay the past employee but got it in her head she didn’t want to waste pennies on a stamp.  The EDD slapped me good for being so dumb as to waste their time and the client got the worst of it.  I would check with them.  If you were an employee that is.  If not you probably have done all you can do.

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About taxdude8422

Basically I am just a tax nerd, have been all my life. However I have found the more open you are to opportunities the better off you will be in this world. That makes my what is know as an open networker on Linkedin, I will connect with anyone. I am not an expert on Linkedin by any means but one day when I was asking someone to connect I mentioned that I had just been refilled on invites. My new connect asked how I did that. I used that same line for the next month and got asked the same question four times. I started thinking there was a lot of little things it took my sometime to learn. Through this blog I plan to share some of those "Linked Secrets"
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