{"id":5376,"date":"2022-02-05T17:24:11","date_gmt":"2022-02-05T22:24:11","guid":{"rendered":"https:\/\/falconexpenses.com\/blog\/?p=5376"},"modified":"2022-03-07T21:03:02","modified_gmt":"2022-03-08T02:03:02","slug":"bank-fees-tax-deduction","status":"publish","type":"post","link":"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/","title":{"rendered":"Bank Fees Tax Deduction"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dd439e9732e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dd439e9732e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#Are_you_self-employed_or_run_a_small_business_and_want_to_know_about_bank_fees_tax_deductions_Read_this_article_to_learn_what_bank_fees_you_can_deduct_and_how_to_do_it\" >Are you self-employed or run a small business and want to know about bank fees tax deductions? Read this article to learn what bank fees you can deduct and how to do it.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#Can_you_write-off_bank_fees\" >Can you write-off bank fees?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#Are_bank_fees_deductible_on_Schedule_C\" >Are bank fees deductible on Schedule C?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#Can_you_deduct_overdraft_fees\" >Can you deduct overdraft fees?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#What_bank_fees_can_you_deduct_from_your_business_taxes\" >What bank fees can you deduct from your business taxes?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#How_to_Write_off_bank_fees\" >How to Write off bank fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/falconexpenses.com\/blog\/bank-fees-tax-deduction\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>\n<h2 class=\"wp-block-heading\" id=\"are-you-self-employed-or-run-a-small-business-and-want-to-know-about-bank-fees-tax-deductions-read-this-article-to-learn-what-bank-fees-you-can-deduct-and-how-to-do-it\"><span class=\"ez-toc-section\" id=\"Are_you_self-employed_or_run_a_small_business_and_want_to_know_about_bank_fees_tax_deductions_Read_this_article_to_learn_what_bank_fees_you_can_deduct_and_how_to_do_it\"><\/span>Are you self-employed or run a small business and want to know about bank fees tax deductions? Read this article to learn what bank fees you can deduct and how to do it. <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image alignwide size-full\"><a href=\"https:\/\/falconexpenses.com\/blog\/wp-content\/uploads\/2022\/02\/bank-fees-tax-deduction-complete-guide.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1000\" height=\"563\" src=\"https:\/\/falconexpenses.com\/blog\/wp-content\/uploads\/2022\/02\/bank-fees-tax-deduction-complete-guide.png\" alt=\"\" class=\"wp-image-5495\" srcset=\"https:\/\/falconexpenses.com\/blog\/wp-content\/uploads\/2022\/02\/bank-fees-tax-deduction-complete-guide.png 1000w, https:\/\/falconexpenses.com\/blog\/wp-content\/uploads\/2022\/02\/bank-fees-tax-deduction-complete-guide-300x169.png 300w, https:\/\/falconexpenses.com\/blog\/wp-content\/uploads\/2022\/02\/bank-fees-tax-deduction-complete-guide-768x432.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/figure>\n\n\n\n<p>Keeping an eye on unnecessary expenses and maximizing your tax deductions are important to self-employed, <a href=\"https:\/\/falconexpenses.com\/blog\/what-is-a-1099-employee\/\">1099 employee<\/a>, and small business owners. Therefore, many self-employed people are interested in learning about bank fees tax deduction. Many ask themselves, are bank fees tax deductible for business?<\/p>\n\n\n\n<p>In this article, we explain when bank fees are tax-deductible for businesses and how to write off bank fees.&nbsp;<\/p>\n\n\n\n<p>Keep reading to learn.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"can-you-write-off-bank-fees\"><span class=\"ez-toc-section\" id=\"Can_you_write-off_bank_fees\"><\/span>Can you write-off bank fees?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, you can write off bank fees as a business expense. You can take this deduction if you\u2019re an Uber driver, a graphic designer, a realtor, or any other type of self-employed individual or a small business owner.<\/p>\n\n\n\n<p>According to the IRS what makes an expense a business deduction is that the expense must be both <em>ordinary<\/em> and <em>necessary<\/em> for your business.<\/p>\n\n\n\n<p>To determine if an expense is ordinary and necessary if it meets these two criteria:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>An expense is ordinary if it\u2019s accepted and common in your industry.<\/li><li>An expense is necessary if it\u2019s appropriate and helpful for your business.&nbsp;<\/li><\/ol>\n\n\n\n<p>A great way to keep track of business expenses is with an <a href=\"https:\/\/falconexpenses.com\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>expense tracker app like Falcon Expenses<\/strong><\/a>. Falcon Expenses allows you to snap pictures of paper receipts so that you never lose a receipt again. In addition, track mileage expenses with an auto-mileage tracker.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"are-bank-fees-deductible-on-schedule-c\"><span class=\"ez-toc-section\" id=\"Are_bank_fees_deductible_on_Schedule_C\"><\/span>Are bank fees deductible on Schedule C?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The short answer is, Yes.&nbsp;<\/p>\n\n\n\n<p>The explanation is below.<\/p>\n\n\n\n<p>Most self-employed individuals, independent contractors, and gig workers work for themselves. What this means is they\u2019re sole proprietors that have not formed any formal business entity. As a result, when self-employed individuals do their business taxes, they attach an <a href=\"https:\/\/falconexpenses.com\/blog\/what-is-an-irs-schedule-c-form\/\">IRS Schedule C<\/a> to the personal income tax return.&nbsp;<\/p>\n\n\n\n<p>Included on your IRS Schedule C form is a section where you add your business expense deductions. In this section, you would also include the amount of your bank fees tax deduction.<\/p>\n\n\n\n<p>Many self-employed individuals use their personal bank accounts for work. However, there are many <a href=\"https:\/\/falconexpenses.com\/blog\/business-bank-account-benefits\/\">benefits of a business bank account<\/a>. Therefore, we looking into opening a business bank account if you have not already. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"can-you-deduct-overdraft-fees\"><span class=\"ez-toc-section\" id=\"Can_you_deduct_overdraft_fees\"><\/span>Can you deduct overdraft fees?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s say, for example, you\u2019re a gig worker. You work as an <a href=\"https:\/\/flex.amazon.com\/lets-drive\" target=\"_blank\" rel=\"noreferrer noopener\">Amazon Flex<\/a> delivery driver. After a long day&#8217;s work, you had your car washed. However, you forgot to check the balance in your bank account before you had your car washed.&nbsp;<\/p>\n\n\n\n<p>It turns out, you didn\u2019t have enough money in your bank account to pay for the car wash. As a result, you were charged a $35 overdraft fee by your business bank. Now you\u2019re asking yourself, is this deductible as an Amazon Flex expense?<\/p>\n\n\n\n<p>The answer to this question is, yes.<\/p>\n\n\n\n<p>Yes, you can deduct the overdraft fee from your business taxes.&nbsp;<\/p>\n\n\n\n<p>The way you determine whether your overdraft bank fee is a deductible business expense is if the purchase was legitimately for your Amazon Flex delivery driver work. This would mean the expense was not related to anything.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-bank-fees-can-you-deduct-from-your-business-taxes\"><span class=\"ez-toc-section\" id=\"What_bank_fees_can_you_deduct_from_your_business_taxes\"><\/span>What bank fees can you deduct from your business taxes?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Bank fees that you can deduct from your business taxes include the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Overdraft fees (as explained in the example above)<\/li><li>Insufficient funds fees<\/li><li>Monthly maintenance fees<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-to-write-off-bank-fees\"><span class=\"ez-toc-section\" id=\"How_to_Write_off_bank_fees\"><\/span>How to Write off bank fees<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Self-employed, independent contractors and gig workers that don&#8217;t have a business entity such as an LLC or Corporation, bank fees deductions are written off on your Schedule C that you attach to your 1040 personal income tax return.&nbsp;<\/p>\n\n\n\n<p>For business entities such as LLCs, C corps, and S corps bank fees deductions are written off on your business tax return, IRS Form 1120.<\/p>\n\n\n\n<p>We recommend that you consult a tax professional when in doubt.<\/p>\n\n\n\n<p><strong>Related: <a href=\"https:\/\/falconexpenses.com\/blog\/self-employment-tax-deductions\/\">The Complete List of Small Business and Self Employment Tax Write Offs<\/a><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After reading this article you have learned what bank fees are deductible as a business expense. As long as your bank fees meet the requirements of what is considered an <em>ordinary <\/em>and <em>necessary <\/em>business expense in your industry. In addition, we\u2019ve provided you with how to deduct bank fees from your taxes. Please feel free to contact me if you have any questions about business bank fees and what bank fees you can deduct from your business taxes. You can also email me just to say, hi. You can email me at, <a href=\"mailto:bsugarman@falconexpenses.com\" target=\"_blank\" rel=\"noreferrer noopener\">bsugarman@falconexpenses.com<\/a>.<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>Are you self-employed or run a small business and want to know about bank fees tax deductions? Read this article&#46;&#46;&#46;<!-- AddThis Advanced Settings generic via filter on wp_trim_excerpt --><!-- AddThis Share Buttons generic via filter on wp_trim_excerpt --><\/p>\n","protected":false},"author":20,"featured_media":5495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,1974,2874],"tags":[1942,2896,2897,2884,2899,2882,2901,1986,2898,51,2096],"class_list":["post-5376","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-taxes","category-self-employed","category-small-business","tag-1099-employee","tag-bank-fees","tag-bank-fees-tax-deduction","tag-business-banking","tag-business-banks","tag-business-checking-account","tag-business-write-offs","tag-delivery-drivers","tag-gig-workers","tag-schedule-c","tag-self-employed-tax-deductions"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/posts\/5376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/comments?post=5376"}],"version-history":[{"count":1,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/posts\/5376\/revisions"}],"predecessor-version":[{"id":5855,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/posts\/5376\/revisions\/5855"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/media\/5495"}],"wp:attachment":[{"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/media?parent=5376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/categories?post=5376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/falconexpenses.com\/blog\/wp-json\/wp\/v2\/tags?post=5376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}