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Ñuña
Returning Member

Repaying an overpayment for services as a contractor

I am an independent contractor.  In 2020 I received an overpayment for my services.  In 2021 I repaid the overpayment.  How do I report the repayment in my 2021 tax return ?

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4 Replies
rjs
Level 15
Level 15

Repaying an overpayment for services as a contractor

You report the repayment as a business expense on Schedule C. Enter it under other expenses (not in one of the fixed categories) with a short description such as "Repayment of 2020 overpayment."

 

Ñuña
Returning Member

Repaying an overpayment for services as a contractor


Thank you for answering my question.  I am guessing that TurboTax provides the option you mention : other expenses, correct?

Hal_Al
Level 15

Repaying an overpayment for services as a contractor

Q. I am guessing that TurboTax provides the option you mention : other expenses, correct?

A. Yes. That entry allows you to enter a brief description, which will appear in Part V of Schedule C.

 

As an alternative, you could enter it as "Returns and allowances" (entered in income section, rather than expenses section of the TurboTax self employment interview) which puts it on line 2 of Schedule C. 

 

Either entry is OK. 

Ñuña
Returning Member

Repaying an overpayment for services as a contractor

Great ! Thank you so much !!!!

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