Self-Employed - Enter Customer Rebates or Refunds

Forum|Forum|5 years ago
May 6, 2021
1 reply
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Hi,

Under the self-employed section, it asks for "Customer Rebates or Refunds - If you received any income from customers and gave it back in the form of refunds for returned goods, discounts or rebates, enter the total here."

I often discount my work depending on a client's budget (I compose music for media). So, say my normal rate for a project is $2000 and I discount them 25%. I only ever receive $1500. But, when I create the invoice, I list out my normal rate and then have a line for the discount and then the total for $1500. So I never RECEIVE the money and GIVE IT BACK. Can I still total these discounts for the year to show I "lost" potential income from my normal rate for discounts? Or, is it only if your actually RECEIVE the money and then give it back...

I have not done this in previous years, but I should, if it's possible.

Mike9241

Level 15

you can't deduct lost potential income. so if the invoice shows $2,000 with a $500 discount and you're paid $1,500. it's the $1,500 that you report. if you're only paid $1,000 and use the cash basis you only report $1,000

jcabarlo

Level 2

What if my total invoiced is $10,000.00. But I got paid only $9,000.0 because there is 10% discount and my 1099-NEC shows $10,000.00. Do I report $10,000.00 but show a rebate/discount of $1,000.00?

Best,