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Can freelancers deduct are credit card fees tax deductible?

TL;DR

Yes, freelancers can deduct credit card fees if they are incurred for business purposes.

Detailed Answer

Credit card fees are deductible for freelancers if they are directly related to business expenses. This includes fees for processing payments from clients or charges incurred on a business credit card. Personal credit card fees are not deductible. For example, if a freelancer uses a credit card to purchase supplies or pay for advertising, the associated fees can be deducted as a business expense.

Where to Put It on the Tax Form

Schedule C (Form 1040), Part II, Line 27a - Other expenses

Real World Example

A graphic designer who uses a credit card to pay for design software subscriptions and incurs a monthly processing fee can deduct these fees as a business expense.

Calculation Required

A calculation is required for this deduction.

Calculate the total amount of credit card fees incurred for business transactions over the tax year. Ensure that only fees related to business expenses are included.

Audit Risk & Documentation Tips

Maintain detailed records of all credit card statements and receipts showing the business nature of the expenses. Clearly separate personal and business expenses to avoid issues during an audit.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersSmall BusinessConsultantsPhotographers

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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