Self-Employed - Enter Customer Rebates or Refunds

[christopherjoye]

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]

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]

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,

JC

[JohnB5677]

Please clarify the situation.

• You are on CASH basis accounting (You close an invoice when it's paid).
• Your invoice was for $10,000, not $9,000 with the 10% discount?
• The 1099-NEC that you got was for $10,000?
• The entity that only paid $9,000 should have a 1099-NEC for $9,000.
• If you are CASH basis you should never have a rebate/discount off of income.
• You may however have a rebate.