Are Bank Fees Tax Deductible? (2026)

Yes

Yes, for business accounts. Monthly maintenance fees, wire and transfer fees, overdraft charges, and the annual fee on a business credit card are deductible when the account is used for your business. Payment processing fees, the cut Stripe, PayPal, Square, or a card processor takes, are also fully deductible. Fees on a purely personal account are not.

Where it goes: Schedule C, Line 27a (other expenses); payment processing fees may also go on Line 10 (commissions and fees)

Illustration for whether bank and card fees is tax deductible

Running a business through a bank account creates small, recurring fees, and the ones tied to your business are deductible. That includes monthly account maintenance fees, wire and ACH transfer fees, overdraft and insufficient-funds charges, check-printing costs, and the annual fee on a business credit card.

Payment processing fees are often a bigger number and are fully deductible. When Stripe, PayPal, Square, or a card processor keeps a percentage of each sale, that fee is a business expense. Over a year of transactions it adds up, so it is worth capturing.

The cleanest way to claim these is to run your business through a separate business bank account and card. That makes every fee clearly a business cost and keeps your records clean, which also helps at tax time and if you are ever asked to substantiate anything.

Note that interest on a business loan or business credit card is deductible too, but it goes in a different place (interest), not with the fees. Keep your monthly statements so the fees are easy to total.

When it qualifies

Monthly maintenance, wire, transfer, and overdraft fees on a business account
The annual fee on a business credit card
Payment processing fees (Stripe, PayPal, Square, card processors)
Check-printing and similar business banking costs

When it does not

Fees on a purely personal bank account or card
Personal-use portion of a mixed account (keep business separate to avoid this)

How much can you deduct?

The full amount of fees tied to your business banking and payment processing. Keep statements to total them for the year.

A worked example

Example: your business account charges $15 a month in fees ($180 a year), and Stripe keeps 2.9% plus 30 cents per sale, totaling $640 in processing fees over the year. Both the $180 and the $640 are deductible.

A deduction only counts if you can prove it. NeoReceipt captures the receipt and files it onto the right Schedule C line, so every write-off is documented at tax time.

Try NeoReceipt free 1099 tax calculator

Frequently asked questions

Are bank fees tax deductible for the self-employed?+

Yes, for a business account. Monthly maintenance, wire, transfer, and overdraft fees, plus a business credit card's annual fee, are deductible. Fees on a purely personal account are not.

Are Stripe or PayPal fees tax deductible?+

Yes. Payment processing fees that Stripe, PayPal, Square, or a card processor take from your sales are fully deductible business expenses.

Do I need a separate business bank account to deduct fees?+

It is not strictly required, but it makes the fees clearly business costs and keeps your records clean. Mixing personal and business banking makes the deduction harder to support.

Is a business credit card annual fee deductible?+

Yes. The annual fee on a card used for your business is deductible. Interest on business borrowing is also deductible, but it is categorized as interest rather than a fee.

Are overdraft fees deductible?+

Overdraft and insufficient-funds fees on a business account are deductible as bank fees. The same charges on a personal account are not.

Where do payment processing fees go on Schedule C?+

They can go under other expenses or commissions and fees. What matters is that they are captured; keep your processor statements so the annual total is accurate.