Dear Proverbs Wife,
Why do you consider mail-in-rebates as “earnings / income” when they’re simply a refund of money you previously spent?
Wouldn’t this mess you up when filing income taxes (since you’d essentially get taxed twice on it)?
This is a question was in response to my February Monthly Earnings post. In regards to rebates…I count them as income for the purpose of keeping an account of the money I contribute to my family budget. Rebate income is not income that I report to the IRS, it is simply listed for me to keep a record.
The reason I count rebates as income is so that I can accurately calculate how much I need to contribute to my savings accounts each month.
The Myth:
Rebates are a refund of money you have spent.
Rebates are not always a refund of money that you’ve already spent. Many people have learned to use coupons and sales that allow them to make money through rebates rather than simply get a refund of their money.
I specifically select rebates that I can combine with sales and coupons. I list these scenarios on my weekly deals posts. Combining multiple savings techniques results in the opportunity to earn money on the deal.
For example see the case below.
Total OOP: $3.51
Total Value of Items: $103
Savings 97%
$103-$3.51=99.49 reasons why I love using coupons
See the coupon scenarios here
$4 worth of coupons & $10 Mail in Rebate for mouthwash
Profit after rebate $6.49
**The cost of the mouthwash was $19.98 retail
**I used coupons and EB’s to reduce my total for everything above from $103 down to $3.51 out-of-pocket
**I paid $3.51 for all 21 items in the picture above
**How much did I pay per item?..$3.51 (divided by) 21 items=$0.16 per item
**$10.00 (-amaount of rebate)$0.32 (average cost I paid for 2 mouthwash)=$9.68 (Profit after Rebate)
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AWESOME! thanks so much for answering…never thought of it like that!
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I count my rebates as ‘incoming money’ also.
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I heart rebates!
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