Returns and Allowances Schedule C; Insurance write offs qualify?

[VanillaXtract]

I am a therapist with my own practice. Let's say I charge $150 an hour for therapy as my normal rate. However, the insurance only reimburses $100. For my record keeping, I put the $50 in as a write-off. Can I then put this in on line 2 of my Schedule C (Returns and allowances)?

[Bsch4477]

No. If you were paid $100 that is your income with no deduction for the $50 you did not receive. The good news is that you don’t pay tax on the $50 you didn’t receive. 

As a practical matter I think you can understand that using your logic, a therapist could set their fee at $200, receive $100 and then write off the other $100 and so report no taxable income. 

[VanillaXtract]

Yes that makes perfect sense. So is it just a logical reason or is that how this portion of the tax code is written? I do show income with clients that have no insurance so they do pay the full rate of $150.

[Bsch4477]

It’s both. You can only deduct an expense. You can’t deduct the difference between what you expected to receive and what you got.