Small Business Tax Deduction Question

[crayiii]

What is the name of your state? Oregon


I operate a small business that is a vendor to larger business. To my top clients, I offer volume rebates. For example, when they reach a certain sales point, I provide a 10% off line item on the invoice.

Are those rebates that I provide tax deductible? Does it matter how I handle them? In other words, should I charge the full amount and then send a check? Or is this even allowed?

 

[anteater]

Sure, it is allowed. It is not really a "deduction" in the sense that your cost of goods sold or other expenses are. Volume discounts simply lower your revenue.

 

[LdiJ]

What is the name of your state? Oregon


I operate a small business that is a vendor to larger business. To my top clients, I offer volume rebates. For example, when they reach a certain sales point, I provide a 10% off line item on the invoice.

Are those rebates that I provide tax deductible? Does it matter how I handle them? In other words, should I charge the full amount and then send a check? Or is this even allowed?

You are handling it properly now. As the other poster said, the volume rebates simply lower your gross revenues.