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Is are stripe fees tax deductible a valid tax write-off?

TL;DR

Yes, Stripe fees are generally tax deductible as a business expense, provided they are directly related to the operation of your business and not reimbursed by clients.

Detailed Answer

Stripe fees qualify as a deductible business expense under the category of 'ordinary and necessary' expenses incurred in the course of running a business. These fees are typically considered a cost of doing business, similar to other payment processing fees. Deductibility applies when the fees are directly associated with business transactions. However, if the fees are reimbursed by clients or are personal in nature, they are not deductible. For example, a freelance graphic designer who uses Stripe to process client payments can deduct the fees charged by Stripe as a business expense. It is important to ensure that these fees are not double-counted if they are included in the gross income reported.

Where to Put It on the Tax Form

Schedule C, Line 27a (Other expenses)

Real World Example

A freelance web developer earns $50,000 in a year and pays $1,500 in Stripe fees for processing client payments. The developer can deduct the $1,500 as a business expense on Schedule C, reducing the taxable income to $48,500.

Audit Risk & Documentation Tips

Audit risk for deducting Stripe fees is generally low, but maintaining clear records is crucial. Keep detailed statements from Stripe showing the fees charged, along with corresponding invoices and client payment records. Ensure that the fees are not reimbursed by clients and are solely business-related.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

FreelancersE-commerceConsultantsSmall Business Owners

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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 25, 2025