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Is are stripe fees tax deductible tax deductible?

TL;DR

Yes, Stripe fees are generally tax deductible as they are considered ordinary and necessary business expenses. However, it's important to ensure they are directly related to your business activities.

Detailed Answer

Stripe fees, like other payment processing fees, are deductible as ordinary and necessary expenses under IRC §162, provided they are incurred in the course of running your business. These fees are typically deducted in the year they are incurred. For example, if you are a freelance graphic designer and you use Stripe to process payments from clients, the fees Stripe charges you for these transactions can be deducted as a business expense. However, if you use Stripe for personal transactions, those fees are not deductible. It's crucial to maintain clear records that distinguish between business and personal transactions.

Where to Put It on the Tax Form

Schedule C, Line 27a for sole proprietors and single-member LLCs. For partnerships and corporations, it would be included in the 'Other Deductions' section.

Real World Example

A freelance graphic designer processes $10,000 in client payments through Stripe over the year and incurs $300 in Stripe fees. The designer can deduct the $300 as a business expense on Schedule C, Line 27a, reducing taxable income.

Audit Risk & Documentation Tips

The audit risk for deducting Stripe fees is generally low, but it's important to maintain documentation. Keep detailed records of all transactions processed through Stripe, including invoices and statements showing the fees charged. Ensure that these records clearly separate business from personal transactions to substantiate the deduction if questioned by the IRS.

IRS Reference

IRC §162; 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 15, 2025

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