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Are Chargebacks Tax Deductable?

Corporate Law Discussions

Are Chargebacks Tax Deductable?

Postby Aelfdene » Mon Dec 05, 2016 6:43 pm

s About Taxes)/are chargebacks tax deductable? Advertisement Expert: MEdusa - 11/9/2009 i work on 100% comm. and if a client does not pay 6 monthly payments i get charged back 100%  I pay taxes on the money when i get paid so I'm assuming it has to be tax deductible.  Is this true and if so what form do i use at the end of the year.  I live in Fl so no state tax.

ANSWER: Interestingly enough, repaid payroll is a 2% deduction so you sort of get screwed. Do you get your pay as a 1099 or w-2? do you actually write a check or is it just netted(best idea) against your next draw? I assume you file a 1040 and if pay comes out as wages, the expense for repaid wages is on 2106. As I said, the outcome is less then perfect.  If your employer will just net it against your next pay, then you dont have a repay/2% issue.

If you file a schedule C, the expense would be a misc expense on Schedule C and you would get 100% benefit for the offset.


---------- FOLLOW-UP ----------

I get a W2.  They take the money out of my next check.    So if I got a check comming for 2000, and I have charge back of 1000 I get 1000.  How far back can I go because I haven't done this in the past yrs.  What would the "name" of this deduction be, chargebacks?
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Are Chargebacks Tax Deductable?

Postby hazaia23 » Fri Dec 09, 2016 11:29 pm

if netted out and all you get is the 1000 and the full 2000 is not included in your w2, then you are alreay whole with no deduction available. no? if you still included the original whole amount with the 1k as a reduction from your net pay, yes - you would have a deduction. returns are available for amendment for 3 years from filing or due date or 2 years from tax paid - the later of. MEdusa
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