A quick way to show a discount line item, is to simply enter a negative unit price, then specify in the description what type of discount is given.

NOTE: When you add a line item that's not from your price book (items lists), it's always assumed to be Taxable. In the example below, the sales tax is being reduced by the sales tax calculated on the $25 discount. If you need to give a non-taxable discount, you should setup an item in your price book specifically for this purpose.