topic Returns and Allowances Schedule C; Insurance write offs qualify? in Business & farm

Returns and Allowances Schedule C; Insurance write offs qualify?

VanillaXtract — Mon, 09 Mar 2026 08:54:56 GMT

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)?

Re: Returns and Allowances Schedule C; Insurance write offs qualify?

Bsch4477 — Mon, 07 Mar 2022 02:34:35 GMT

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.

Re: Returns and Allowances Schedule C; Insurance write offs qualify?

VanillaXtract — Mon, 07 Mar 2022 03:04:11 GMT

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.

Re: Returns and Allowances Schedule C; Insurance write offs qualify?

Bsch4477 — Mon, 07 Mar 2022 04:15:32 GMT

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.