Are Credit Card Processing Fees Tax Deductible?

Are credit card processing fees tax deductible?

Generally, yes. Fees a business pays to accept card payments are usually treated as an ordinary and necessary business expense. The practical challenge is tracking them correctly — especially when fees are netted out of deposits. Confirm treatment for your situation with your CPA.

Estimates only. Results vary. No guarantee of approval, rates or savings.

Why netted deposits cause problems

If your provider deducts fees before depositing, your bank deposits are smaller than your actual sales. Booking deposits as revenue can understate both sales and fees. Many bookkeepers record gross sales and the fees separately using the monthly statement.

Keep the records

Save every monthly statement and year-end summary. Payment platforms may also issue Form 1099-K reporting gross payment volume, which won't match your net deposits — the difference is usually fees, refunds and chargebacks.

Common questions

Where do processing fees go on my books?

Often a 'merchant fees' or 'bank and processing fees' expense account. Your bookkeeper or CPA can confirm the right category.

Is a surcharge I collect income?

Surcharges collected are generally part of gross receipts. Ask your tax professional how to handle them.

Is this tax advice?

No. This is general education; consult a qualified tax professional for your situation.