If you pay $100 a month for your phone bill for a total of $1200 for the year but they refund you $100 then your deductible expense is only $900. The refund is NOT entered as income is just reduces the deduction.
Same as if you spent $500 on supplies at Office Depot and you got a rebate of $50 then the deductible expense is only $450 but again the rebate is not also entered as income.
