Payment Processing Fees

PayPal, Stripe, and other payment processor fees on business income.

Tax Form

Schedule C, Line 10

Estimated Savings

$50-2,000/year

How It Works

Fees charged by payment processors on your business income are deductible. This includes PayPal fees, Stripe fees, Square fees, and similar processing charges. These fees reduce your actual earnings and should be deducted as a business expense.

IRS Rules & Requirements

Payment processing fees on business income are deductible
PayPal, Stripe, Square, Venmo Business fees qualify
Currency conversion fees on international payments qualify
Wire transfer fees for business payments are deductible
Track fees separately from income received

Real Examples

PayPal fees on brand payments totaling $300/year = fully deductible

Stripe fees on course sales at $500/year = fully deductible

Currency conversion fees on international payments = fully deductible

Common Mistakes to Avoid

Forgetting that platforms deduct fees before paying you
Not tracking fees separately from net income
Missing fees on smaller transactions

Pro Tip

Most payment processors provide annual fee summaries. Download these reports at year-end for easy tax preparation.

Related Deductions

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Accountant & CPA Fees

Tax preparation, bookkeeping, and accounting services for your business.

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Business Insurance

Liability insurance, equipment insurance, and business coverage.

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Advertising & Promotion

Social media ads, sponsored posts, promotional materials, and marketing costs.

Not sure if you qualify?

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