Per the IRS, cash rebates from a dealer or manufacturer for an item you buy generally not taxable. If you received a 1099-K, it reflects gross income received for this activity and needs to be reported since the IRS has received the document also.
You should enter the 1099-K in TurboTax (see below) and add a separate line item with a negative amount that represents the rebate and coupon income that is included on the 1099-K. You can essentially enter 2 line items in the ''Additional Income'' section, one as a positive number for the full amount and below it an offsetting negative amount for the total of the manufacturer incentives received. Image attached.
Here is how to enter your 1099-K. https://ttlc.intuit.com/replies/5108144
I am unable to enter negative value in the field. Is the solution still valid?
If you receive a Form 1099-K reporting non-taxable payments (e.g. coupon redemption, cash rebates, casual sales of personal property at less than your cost), you can report it in the Other Reportable income interview.
Go to the interview as follows: Federal Tax > Income > Less Common Income > Miscellaneous Income > Other Reportable Income.
Enter the 1099-K amount and then make an equal, negative (offsetting) entry to reflect that the income is not taxable.
See example (from Home & Business):
Any idea on how to address in Turbo tax online version. (delux product). Turbo tax is asking to complete self-employment section to enter 1099K (for Cash Rebates) instead allowing to add under Other income.
Here is how you would delete that from self-employment income in TurboTax Online:
So you just add one line with your income and another line with negative value in Miscellaneous income section and good to file?
Yes, if you receive a Form 1099-K reporting non-taxable payments (e.g. coupon redemption, cash rebates, casual sales of personal property at less than your cost), you can report it in the Other Reportable income interview.
However, if this was income was business income or hobby income, it is taxable and should be reported as business or hobby income. The non-taxable method is only for the types income listed above.
It is either business income, hobby income or the sale of personal items (garage and yard sale type income).
Mine is from product testing in amazon.
I buy the product, test it and review it.
The seller will send me the amount I paid for the item. It was about $1200 (VA has a limit 0f $600).
So I can use the solution by using the mentioned method and cancel it out right?
Yes, This is exactly I am facing now. I am from Illinois and I crossed the $1000 limit. I think we have to file 1099-K since PayPal will send it to IRS. As of now, I have added the same amount to Refunds for returned goods, discounts, or rebates. It cancelled out each other. But it is not an income. Not sure how to handle this,
Yes, ordinary and necessary related expenses can offset the income.
No, money made back from rebates and coupons is not taxable. Yes, definitely include the Form 1099-K received because PayPal did send it to the IRS, as well. If the amount on Form 1099-K was exactly the amount for money made back from rebates and coupons, then yes, it was handled properly. It is also acceptable to include other expenses for this work. If no categories seem to apply, follow these steps for any additional, related costs:
Enter a Description for your offsetting amount, such as Form 1099-K Costs and Continue
If this was not business related income but personal property sales, it is a best practice to include Personal Property Sales/Cost of Personal Property in the descriptions.
@bhavanishankar
Hello! I have received money from sellers of products that I have bought in amazon (rebates). He has not bequeathed me the 1099k yet do I need to put it on taxes?
thanks
Seller rebates of a portion of your purchase price of the products you bought is not income, and is not taxable. You do not need to report it on your tax return.
What supporting documentation will I need to have to show the income is non-taxable? For example, I use Ibotta rebates and cashback programs for various groceries and online retailers. Over time, the $1-$2 adds up to $20 ( the minimum to request payment) and they send a check. This is now reported as income but I have no way of documenting all of the transactions in which this came from.
You just have to do the best you can. If you don't have sufficient supporting documents, the IRS may decide it is taxable. All you can do is explain why it isn't.