Ask An Accountant-Claiming Pay Pal Fees

It’s that time of the year to get your year end tax information organized.  My “Ask An Accountant” series should help with many questions that may arise. Remember, if you have a tax question, email my husband who is an experienced accountant at cjwtaxpro@gmail.com

Question:
Can I claim pay pal fees as a business expense?

Answer:


Yes, you can claim the fee paypal charges when you receive payment.  Keep in mind however, the full amount billed would be the income reported.  For example,  you bill someone $100 for advertising, the payment is received in your paypal account for $95 ($5 transaction fee).  You would report the revenues as $100, bank fees of $5 and deposit the $95 into your operating bank account.

Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

IRS Circular 230 Notice: Any U.S. tax advice in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions

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