Where do bank and payment processing fees go on Schedule C?
Line 27a — Other expenses (commissions on Line 10)
Business bank charges and card processing fees are normally deducted on Schedule C Line 27a, 'Other expenses', with a short description such as 'merchant processing fees'. Commissions paid to a marketplace, brokerage, or referral partner belong on Line 10, 'Commissions and fees'. Both matter because platforms usually report your gross sales, so unless you deduct the fees they withheld you pay tax on money you never received.
Examples
- Stripe, Square, or PayPal processing percentages.
- Monthly business account maintenance charges.
- Marketplace commission withheld from each order.
Watch out for
- Download monthly fee statements from every platform you sell through.
- Personal account fees are not deductible — keep business banking separate.
- Reconcile gross reported sales to bank deposits so no fee is missed.
Full checklist for your trade
Stop guessing the category
DocuSpending reads each receipt and assigns the Schedule C category for you, then totals the year on demand.
General information, not tax advice. Amounts, limits, and percentages change between tax years — check the current IRS Schedule C instructions or ask a tax professional about your situation.
Get DocuSpending updates
Join the list for product updates and receipt-organization tips. By joining, you agree to receive these emails. You can unsubscribe when emails begin.