tax question for COMC returns

[boxbuster7]

So lets say as a seller I had:

$300 in returned cards from COMC last year

On a normal sale they take 5% in fees. On a return they give back the 5% they take from the seller to the buyer.

I report returns as an expense because the original sales are included in my total sales figure

I had been subtracting the 5% transaction fee and claiming $285 in returns as an expense.

Is this correct?

[checkoutmydeals]

If you're filing Schedule C, you can put returns on line 2 Returns and Allowances. I would keep the initial 5% as an expense. I would probably add the 5% they give back to Gross Receipts on line 1.

So, if you had sales of $300, paid $15 in fees, received a return of $285 and were rebated $15 in fees, I would think:

Line 1: Gross Receipts +315
Line 2: Returns -300
Line 10: Commissions and Fees: -15

Alternately:

Line 1: +300
Line 2: -285
Line 10: -15

If you're not filing Schedule C, then I don't know which lines. But in general, there should be 0 net effect on your income, although you did incur $300 in sales and $300 in returns.

DISCLOSURE: I am not a tax professional. I make a good faith effort to file my taxes every year, and believe that I can justify all of the numbers.

[boxbuster7]

Originally Posted by checkoutmydeals

If you're filing Schedule C, you can put returns on line 2 Returns and Allowances. I would keep the initial 5% as an expense. I would probably add the 5% they give back to Gross Receipts on line 1.

So, if you had sales of $300, paid $15 in fees, received a return of $285 and were rebated $15 in fees, I would think:

Line 1: Gross Receipts +315
Line 2: Returns -300
Line 10: Commissions and Fees: -15

Alternately:

Line 1: +300
Line 2: -285
Line 10: -15

If you're not filing Schedule C, then I don't know which lines. But in general, there should be 0 net effect on your income, although you did incur $300 in sales and $300 in returns.

DISCLOSURE: I am not a tax professional. I make a good faith effort to file my taxes every year, and believe that I can justify all of the numbers.

Cool thanks, I had a realization that I am already accounting for that initial 5% transaction fee when the item originally sold. I send my accountant a column of COMC's "5% transaction fee" So I believe including it in returns would count it twice

Thanks for the info. Taxes suck