This article contains links to products or services from one or more of our advertisers or partners. We may receive a commission when you click or make a purchase using our site. Learn more about how we make money.
Are credit card fees tax-deductible?
Get tax deduction on some credit card fees.
IRS tax rules allow you to get a tax deduction for credit card fees, including the annual fee, cash advance fees, foreign transaction fees and balance transfer fees. Unfortunately, this doesn’t apply to all credit cards.
Can I tax deduct credit card fees?
If you use your credit card for personal expenses, your card fees aren’t tax-deductible. But if you use your credit card for business expenses — you can get tax deductions on most of your credit card fees. The following fees are tax-deductible:
- Annual fee
- Foreign transaction fee
- Late payment fee
- Overdraft fees
- Cash advance fees
- Balance transfer fees
- Most other credit card fees
Note: If your business accepts credit card payments, you can get a tax deduction for fees charged by your payment processor.
Criteria for deducting credit card fees
To deduct your credit card fees, you need to:
- Have a business. A sole proprietorship, a corporation or a limited liability company (LLC) are all eligible to get tax deduction on your business-related credit card purchases.
- Separate your business expenses. If you use your personal credit card for business purchases, you can’t deduct your entire card’s annual fee because you’ll need to calculate how much money you spend on business purchases as opposed to your personal purchases. To simplify bookkeeping, use a business credit card for your business purchases.
- Keep good records. This is important, especially if you mix personal and business purchases. With good recordkeeping, you can easily find which fees were incurred on your business-related purchases.
Compare business credit cards
The best way to separate your business from personal expenses is to use a business credit card. You can deduct the card’s annual fee — and apply for a card with a higher annual fee that yields greater rewards.
Most credit card fees incurred on your business-related purchases are tax-deductible. This includes the annual fee, cash advance fees, foreign transaction fees, balance transfer fees and most other credit card fees.
But to simplify accounting and to easily calculate your tax deduction, consider applying for a business credit card.
Frequently asked questions
More guides on Finder
Tax guidelines and regulations for large money transfers to Hong Kong
Sending a large money transfer to Hong Kong? Learn about laws and required documentation before you transfer.
Mastercard extended warranty: Do I get this perk?
It doesn’t come standard, but specific Mastercard products have an extended warranty benefit.
12 green brands that plant trees with every purchase
Branch out by supporting these socially responsible businesses.
Square Cash App investing review
Fees, features and feedback to consider before you invest through Square’s Cash App.
SogoTrade pays you for qualifying limit orders. Learn more.
Community Bank of the Midwest loans review
This Kansas bank specializes in agriculture financing, but is set to be acquired.
Susquehanna Community Bank loans review
Agriculture businesses and other local operations can benefit from a range of low-cost financing.
CFG Bank loans review
A Baltimore bank with a specialized financing program for lower middle market companies.
Keeper Tax review
Maximize your tax savings by having this 1099 expense tracker categorize business purchases for you.
Virtuwell review Dec 2020
This virtual clinic has an innovative model that cuts down your waiting time — but it’s not for everyone.
Ask an Expert