Can I Write This Off?

Is can you claim credit card fees on taxes a business expense?

TL;DR

Yes, credit card fees can be claimed as a business expense if they are incurred for business-related transactions.

Detailed Answer

Credit card fees are deductible as a business expense when they are directly related to business transactions. This includes fees for processing payments from customers, annual fees for business credit cards, and interest on business-related purchases. Personal credit card fees are not deductible. For example, if a business owner uses a credit card to purchase inventory or pay for business services, the associated fees can be deducted. However, if the credit card is used for personal expenses, those fees are not deductible.

Where to Put It on the Tax Form

Schedule C (Form 1040), Part II, Line 27a for sole proprietors; or on the relevant business tax return form for other entities.

Real World Example

A freelance graphic designer uses a business credit card to purchase design software and pay for online advertising. The credit card processing fees and any interest incurred on these business-related purchases are deductible.

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. This includes adding up all processing fees, annual fees, and interest related to business purchases.

Audit Risk & Documentation Tips

Maintain detailed records of all credit card statements and ensure that business and personal expenses are clearly separated. Keep receipts and invoices for all business-related purchases made with the credit card to substantiate the deduction if audited.

IRS Reference

IRS Publication 535, Business Expenses

Relevant Industries

Small BusinessFreelancersRetailE-commerce

Popular Related Pages

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

Back to Search