If the rebates are cashback rewards, they are considered discounts on purchases and not generally taxable.
However, if the rebates are business related you would need to reduce your related expenses which will increase your net income and impact your tax liability. Alternatively, you can report the rebates as other income if it's not feasible to determine which expenses the rebates apply to.
If the rebates are not business related, you can report the amount from the 1099-K as other income and then include another line that shows the same amount as a negative to zero it out.
First, set up the amended return within TurboTax. Note that the 1040-X will not be available within the program until mid-February.
To report the 1099-K:
- within your account, navigate to Federal, then Wages & Income
- scroll to Other Common Income
- choose Start next to 1099-K
- on the screen that asks if you received a 1099-K, select Yes
- when asked which type of income the 1099-K is for, choose Other
- enter the details from the 1099-K
- click Continue
To zero out the income:
- navigate back to Wages & Income
- scroll to Less Common Income
- choose Miscellaneous Income, 1099-A, 1099-C
- click Start next to Other Reportable Income
- On the screen that asks if you have any other taxable income, select Yes
- For the description, enter 1099-K Cash Back Rewards. In the amount box, enter the negative amount.
- Click Continue.
@Lily30
