topic If my business goes on a schedule C of my personal return and I used a credit card to pay my estimated taxes, is the fee deductable on the schedule C then? in Business & farm

If my business goes on a schedule C of my personal return and I used a credit card to pay my estimated taxes, is the fee deductable on the schedule C then?

mark381 — Fri, 27 Mar 2020 22:21:17 GMT

Re: If my business goes on a schedule C of my personal return and I used a credit card to pay my ...

MarilynG1 — Fri, 27 Mar 2020 22:36:45 GMT

Yes, the fee you paid to use your Credit Card to pay your Estimated Taxes would be a Business Expense on your 2020 tax return (unless you paid it in 2019).

Re: If my business goes on a schedule C of my personal return and I used a credit card to pay my ...

mark381 — Tue, 31 Mar 2020 17:12:18 GMT

My apologies for asking the same question twice. I couldn't find the question again the first time, and I even seem to have 2 different profiles now. My question is here

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/deduct-credit-card-convenience-fee-for-sch-c-business/01/1377662

and here

https://ttlc.intuit.com/community/business-taxes/discussion/re-if-my-business-goes-on-a-schedule-c-of-my-personal-return-and-i-used-a-credit-card-to-pay-my/01/1369387#M46247

and I got two opposite answers. I'm not sure how to proceed.

Re: If my business goes on a schedule C of my personal return and I used a credit card to pay my ...

KatrinaB48 — Tue, 31 Mar 2020 17:34:32 GMT

The credit card fees must be directly related to your schedule c business income to be deductible. if your only income is from self-employment, then the estimated tax payments are directly related and deductible. However, if you have other income reported on your return the estimated tax payments are not directly related to your business.

Re: If my business goes on a schedule C of my personal return and I used a credit card to pay my estimated taxes, is the fee deductable on the schedule C then?

Crzz — Thu, 25 Mar 2021 09:30:50 GMT

I'm defintely not a tax expert but have been trying to find more information on the two different opinions expressed on this topic. I'm leaning towards the fee is deductible on Schedule C from two other sources on the web:

https://www.investopedia.com/ask/answers/102814/what-credit-card-fees-are-tax-deductible.asp with "Businesses can also deduct any credit or debit card processing expenses involved with paying their taxes." and Schedule C is called out earlier in the article.

And on the IRS payment page itself: https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card under "Additional Information" it says "Card processing fees are tax deductible for business taxes."

So to me, what KatrinaB48 says seems to make sense...like the only reason I'm paying estimated taxes is due to self employment/business income, so card processing fees associated with that are business expenses.

There is a bit of interpretation here and it would be great if there was an official IRS statement somewhere specifically confirming this stance...

Re: If my business goes on a schedule C of my personal return and I used a credit card to pay my ...

Irene2805 — Thu, 25 Mar 2021 14:13:35 GMT

That's the "beauty" of any law or regulation -- it's subject to interpretation!

If you are making the estimated tax payments because of your business because:

Your self-employment income is your only income; OR
Your have enough taxes withheld from your W-2 income to cover your tax bill for that...

then the credit card fees are deductible.

@Crzz