Is it Tax Deductable? Menards Rebates used to buy supplies.

[Derek Rice]

We recently had several Menards home improvement stores open in my area and they are awesome! I tend to get business items there for about the same price as anywhere else, but if you time their ads, they send you rebates for the money that you spent! So my question is: Say I buy a roll of carpet for $1,000 from them. They are running a special where you get 10% back in the form of a rebate check that must be used at Menards. If I go buy a new saw, or a toilet for a house with that $100 rebate check, is it deductible as well as the $1,000 for the carpet? I am deducting $1,100, but I technically only spent $1,000 actual dollars.

[Linda Weygant]

You may only deduct what you actually spend out of pocket.  There are two ways to handle it.

1.  Deduct the $1000 spent.  Do not deduct the $100 spent with the rebate.

2.  Deduct the $1000 spent.  Then include the $100 rebate in income (although you do not have to - @Hy Schmiedeskamp is correct that it is not reportable income).  Then deduct the $100 spent on the second item.

Same net effect.