Chargebacks Tax Deductible?
- Thread starter sjswasey
- Start date
- 4,023
Chargebacks from last year should already be accounted for on the 1099 you got from the company.
some do some don't. I've found that you have to do the math yourself.
- 18,988
If you report income by 1099 you have to check with each company to see if they deduct them from the 1099. Some do, some don't.
If you report deposits then it's already accounted for. In that case they would be deductable if you wrote a check to a company for one.
Bottom line, yes, it's money you didn't get or had to return so you won't pay taxes on money not earned.
How it's accounted for is the question.
- 1,912
It depends how the 1099 was generated. Was it based off the advance balance or the as earned balance?
If the company is reporting your advance as income, you'd have to pay taxes on an advanced balance, Id go as earned and you wouldn't have to worry about the tax implications of a chargeback. In my opinion, Id never take an advance from a company that would 1099 you for a loan.
If the company is reporting your advance as income, you'd have to pay taxes on an advanced balance, Id go as earned and you wouldn't have to worry about the tax implications of a chargeback. In my opinion, Id never take an advance from a company that would 1099 you for a loan.
If the advance is considered taxable by them, the chargeback should reverse the taxable income.
Example:
100% commission rate 9 month advance
Advanced $900 (1099 value $900)
Policy lapses in month 3
Charged back $600 (1099 value would be $300 now).
- 1,912
Correct, except that chargeback could possible happen the next year. So you're paying taxes on revenue you will write off the the following year.
I personally, wouldnt want to do that.
- 18,988
You also personally don't have a clue about being a writing agent. Or how a writing agent should report.
I don't think people are asking for advice from FOS marketers when they pose questions here.
But you desk jockeys are full of advice about things you know nothing about.
- 1,912
Looks like John Dugger came out to play.
Unfortunately your wrong on this one.
If you write a deal in December and get advanced before January 1st, it will show up on your 1099 for the current year.
If they charge back the following year you'd have to claim that loss at another time.
The fix for that would be to go as earned for a company that would 1099 agents on a loan (advance). Which I disagree with since its technically not income.
Now I know you will likely revert to name calling and libel to prove your point. You're very predictable.
