Debit Card Cashback, Taxable?

[WhyNotFab]

What is the name of your state? Florida

Hi, I'm new here.. but just by browsing around the forum, it is the best place so far I've found to maybe answer many questions I have now that I decided to start my own small business. Maybe someone can help me out with this one!

With a business account, and recieving cashback with purchases with my Paypal debit card, are the amounts recieved as a result of cashback considered an income that I have to claim on income taxes? I think if the program as a type of "reward/rebate" for using the card and being a verified user, it doesn't seem to me like it counts as a source of income. Any information regarding this would help a lot.

ex. i sell a product for $20, recieve $20 in my paypal from the customer, buy the product for the person with my Paypal card ($15.00) and i recieve $0.15 as a cashback (not much but adds up over time of running a business that way) do I only claim the $5 profit from the sale, or also the $0.15 as added income? Also would the fees I pay (deducted % from amounts recieved) be counted as expenses, or just something I deal with that's lost profit?

Sorry for the long message full of questions, maybe I made some kind of sense.. lol.

Ricky Clinton

[WhyNotFab]

Anyone know?

[LdiJ]

Originally Posted by WhyNotFab

What is the name of your state? Florida

Hi, I'm new here.. but just by browsing around the forum, it is the best place so far I've found to maybe answer many questions I have now that I decided to start my own small business. Maybe someone can help me out with this one!

With a business account, and recieving cashback with purchases with my Paypal debit card, are the amounts recieved as a result of cashback considered an income that I have to claim on income taxes? I think if the program as a type of "reward/rebate" for using the card and being a verified user, it doesn't seem to me like it counts as a source of income. Any information regarding this would help a lot.

ex. i sell a product for $20, recieve $20 in my paypal from the customer, buy the product for the person with my Paypal card ($15.00) and i recieve $0.15 as a cashback (not much but adds up over time of running a business that way) do I only claim the $5 profit from the sale, or also the $0.15 as added income? Also would the fees I pay (deducted % from amounts recieved) be counted as expenses, or just something I deal with that's lost profit?

Sorry for the long message full of questions, maybe I made some kind of sense.. lol.

Ricky Clinton

I would see the .15 as a reduction of your costs of goods sold....its like getting a discount on the merchandise you are purchasing to sell.

[WhyNotFab]

meaning, that it is taxable since that is just that much more profit I recieve?

what about the fees I pay towards paypal, are they expenses that are tax deductable?