Credit Card Fees Can Be Tax Deductible
The IRS recognizes merchant fees as an essential operating cost
At the beginning of each year, business owners look ahead and focus on what’s next in store for their business. One task on that list is filing taxes. For merchants who have done a good job of tracking receipts and documenting business expenses, this task is much easier. And for everyone else, it’s pulling reports and compiling information to provide to a financial accountant by the dreaded April deadline.
Processing Fees Are Tax-deductible
For many merchants, the idea of claiming credit card acceptance fees as tax deductible wouldn’t cross their minds. But it should. The IRS recognizes merchant fees (commonly referred to as credit card fees) as an essential operating cost. So, that means that yes, businesses can claim the merchant processing fees they’ve accrued the year prior as a tax-deductible expense.
Both individuals and businesses have the potential opportunity to deduct expenses from their gross income to lower the amount of money they pay in annual taxes to the Internal Revenue Service (IRS). The provisions and deduction procedures for individuals and businesses are different so it is important to understand which ones apply. In general, pretty much anything pertaining to a credit card is not tax-deductible as a personal itemized deduction but is tax-deductible for a business.
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