refunded prepayment entry

Forum|Forum|3 years ago
March 4, 2023
2 replies
22 views

In 2022 we refunded a substantial prepayment to a client (for a cancelled wedding). That prepayment was reported as income in 2021 (although we probably should have not reported it as income). Where do we enter it as a reduction of income for 2022?

Best answer by Monikak11

In TurboTax, you can enter the amount of a refund of money previously included as income by going to the Income section of your Schedule C activity, then:

In the Income section, select Add income for this work
From the list that appears, select Rebates and Refunds under Less Common Income
Enter a description and enter the dollar amount as a positive figure.

See also this help article for more information regarding self-employment income and expenses.

Monikak11Answer

Level 2

In TurboTax, you can enter the amount of a refund of money previously included as income by going to the Income section of your Schedule C activity, then:

In the Income section, select Add income for this work
From the list that appears, select Rebates and Refunds under Less Common Income
Enter a description and enter the dollar amount as a positive figure.

See also this help article for more information regarding self-employment income and expenses.

Carl

Level 11

Depending on the version of TTX you are using, the section could be called "Rebates and Refunds" or "Returns and Allowances". Both mean the same thing.