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Business use. I'll leave it to the pros to opine as to whether expenses should be reduced or the rebate shown as part of gross receipts. (To me it seems the latter is more straightforward.)

While I would treat it as a reduction of expense, in most cases it's probably more correct to include it in gross receipts. If you are an independent contractor (Schedule C) and you are reimbursed by your clients for out-of-pocket expenses, the clients are supposed to include the reimbursements on the 1099-MISC they provide at year end. You report the reimbursement as income, but offset the income with the expense. Since the bank who issued the credit card isn't the entity you purchased the goods/service from, this isn't a discount. However, I can see an exception if the credit card was issued by (that is, the credit is extended by, not just a branded logo on the card) an entity and the cash-back purchases were made from that entity. Then you have a direct discount of price and I would reduce the expense and not report the cash-back as gross receipts.

This analysis is analogous to how some states treat coupons when calculating sales tax, ie., manufacturer's coupons do not reduce the price subject to sales tax, store coupons do.

I'd be curious to hear other opinions.

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