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You can deduct these separately as business expenses as long as they were included in gross income.
For example, you sold $1,000 of goods and gave discounts of $100. If the $1,000 is reported in gross income, the $100 can be reported separately as an expense. If $900 is reported in gross income, no adjustment needs to be made.
To enter the business expense, you can list in Other Common Business Expenses found under Business.
You can also adjust income for the business by choosing Add income for this work. Click the button Rebates/refunds paid. The next screen will allow you to enter the description and dollar amount. This will report these separately from other miscellaneous business expenses and will reduce income in Part I.
From the Federal menu on the left, choose Wages & Income. Expand the menu for Other Common Income. Click Start/Revisit next to Form 1099-K. On the screens that follow, enter the information from your documents.
@VictoriaD75 Thanks. I already got this far but my federal taxes shouldn't increase if the IRS sees this cashback as a discount for purchases made. How can I submit it as a deduction since paypal reported it as gross income?
You can deduct these separately as business expenses as long as they were included in gross income.
For example, you sold $1,000 of goods and gave discounts of $100. If the $1,000 is reported in gross income, the $100 can be reported separately as an expense. If $900 is reported in gross income, no adjustment needs to be made.
To enter the business expense, you can list in Other Common Business Expenses found under Business.
You can also adjust income for the business by choosing Add income for this work. Click the button Rebates/refunds paid. The next screen will allow you to enter the description and dollar amount. This will report these separately from other miscellaneous business expenses and will reduce income in Part I.
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