PayPal tax didnt consider refunds

[knightman221]

I have a paypal business and I recieved my 1099K form and the gross amount on the form was more than I actually recieved. I do a considerable amount of refunds and paypal doesnt deduct that from the gross amount so im getting taxed for the transactions I fully refunded. Say I had 35,000$ in gross amount and I refunded 10,000$ of the 35,000$ making the net/actual amount 25,000$, How would i go about filing it?

[MaryK4 · Accepted solution]

In the Business Income section, you can add in the category of Rebates and Refunds.  This will subtract from the gross income.

This is money you received but then gave back to a customer—a refund for a returned item, a rebate, or a discount. This isn't considered income, but it does need to be reported on your taxes.