Is a mail-in rebate received considered taxable income?

Question

For instance you bought a cell phone with a $100 rebate. If you receive that $100, does it need to go on the 1040?

What about a check from an auto insurance company for the amount over your deductible?

Answer 1

Rebates, discounts, etc. are not considered income. Neither are cashbacks (Discover card) or frequent flyer's mileage. These all fall into the category of "finding a cleaver way to charge less for an item without actually charging less for an item".

Any check from any insurance to cover any loss of property is only taxable when it exceeds the actual loss. If the check, by itself, covered more than the loss on the vehicle, then yes, you have to include in income the amount by which it exceeded the loss. If the answer is "no", then not only it is not income, you might be able to write off the difference between the actual loss and what you recovered on Schedule A.

Example, your 1973 Dart, valued at $9000, was totaled and you got a check from the insurance company for $4000. The $5000 of loss that you had to eat, regardless whether is was because the insurance company valued your car lower, or because of a deductible, may be partially written off on Schedule A. You'll have to do some more research to figure it out. Bring all the paperwork to your tax preparer or go to www.irs.gov.

If, instead, the check was for $10,000, then you'll have to claim $1000 of gain on the "disposition" of your personal property.

Hope this helps! :)

Answer 2

the answer is not any, that's no longer. in assessment to the rebate in 2003, which change right into a private loan adversarial to next year's refund, this stimulus kit is a instantly go back to the electorate of the taxes amassed in 2007. in accordance to the IRS information superhighway web site of FAQs about the tax rebate: Q. Is my stimulus price taxable? A. No. you received't owe tax on your price once you record your 2008 federal income tax go back. yet you should maintain a replica of the IRS letter you acquire later this year itemizing the quantity of your price. interior the shape you do not qualify for the whole volume this year yet you do next year, you'll opt to have the letter as a record of the quantity you earlier received.

Answer 3

The rebate for the cell phone is not taxable income. The check from your insurance company is not income either.

Answer 4

Only income is taxable. You already paid tax on the money that bought the cell phone, so getting it back doesn't mean anything. Same with auto insurance--the money used to pay it is taxed, so getting it back doesn't mean anything if the money was meant to "make you whole." It's not income.

Answer 5

No, generally speaking, neither one would be taxable.

If you received any compensation from an insurance settlement over and above the actual monetary loss, I imagine that could be taxable - ask your insurance agent or a tax professional to be sure.

Visit the IRS website... :-)

Answer 6

If it was an instant reabate, no but mail-in yes beacuse you did receive a check. Not sure about the auto insurance though, the value of you loss from the car should offset unless your car still works, then its a gain and taxed.

Answer 7

no, rebates and refunds are not considered taxable income

Answer 8

No.

Did you gain anything?