topic What is the correct way to account for refunds you have received from vendors on a 1065? in Deductions & credits

What is the correct way to account for refunds you have received from vendors on a 1065?

danielle-51 — Mon, 23 Feb 2026 10:14:59 GMT

We have received less than $500.00 in refunds last year from vendors and I just wanted to make sure I knew what to do when we fill out our 1065. We are a multi-member LLC, taxed as a partnership.

Re: What is the correct way to account for refunds you have received from vendors on a 1065?

AliciaP1 — Wed, 25 Jan 2023 16:56:24 GMT

Refunds from vendors should be credited back to the expense category that applied to the purchase. For example, if you purchased office supplies for $500 and then returned $100 worth of the supplies, you just need to credit the Office Supplies expense account so the net of the purchase totals $400. If that was the only Office Supplies expense you had for the year, you would enter $400 for the office supplies expense category on your Form 1065 return.

Re: What is the correct way to account for refunds you have received from vendors on a 1065?

danielle-51 — Wed, 25 Jan 2023 17:47:28 GMT

Thank you, Alicia. You have helped me two days in a row with your answers to my questions. I appreciate it!