Thank you. I deducted the amount in 2015. Where should I enter the amount in Turbotax 2016? Should it be "Other Income in Turbotax which goes into Schedule C line 6? Also, where can I say "Refund of prior yr expenses" in the form or Turbotax?

Upon further reflection, the cleanest way to do this is to enter it on the 2016 Schedule C as a negative expense.  It will appear as a line item on page 2 Part V of the Sch C (Other Expenses) and TurboTax will subtract it from the total expenses.  Simple & clean.

You'll do this in the Business Expenses section by selecting "Other Common Business Expenses," then scroll to the bottom of the "Let's Write off some business expenses" page and select "Other Misc Expenses."  You'll be shown a write-in grid where you can write "refund of expenses" and then enter the amount using the "dash" symbol to denote negative.

I received a refund from a business expense to purchase supplies in the same year, it was adjusted back to my account so (in effect), I didn't make the purchase. Now does that show as income or what category do I count it in?