Square - is the processing fee a tax write-off?

[Derek]

i used Square for the 1st time today, worked great. the missus wants to know if the 3.5% fee we paid to Square is somehow a write-off, and if so, how would we prove it to the gubment? will Square send us a statement showing the 3.5% fee we paid, that we can use to show the IRS?


tx --- Derek.

 

[BLewis]

Put it in Quickbooks under bank fee or bank processing fee

 

[Derek]

we dont use QB or anything like it. my wife does it all the old fashioned way and then takes it to our accountant :shock:

 

[Brian R]

Yes, but the fact that you only get the Net after processing makes it a moot point. You will be paying taxes on a lesser amount if you do your books according to your debit/credits.

If you do your taxes on your invoice (you're crazy lol), you'll have to list the fee under bank charges etc.



But speak with your accountant...I'm just a carpet cleaner who thinks he knows what he's talking about. lol

 

[Derek]

true Brian! i guess i will have to make up a new invoice for my records then, with the amount after the 3.5% fee...as long as that is legit.

 

[Brian R]

true Brian! i guess i will have to make up a new invoice for my records then, with the amount after the 3.5% fee...as long as that is legit.

No, leave the invoice as what the customer paid.

Your taxes should be done on bank deposits/debits only......er uh...In my "opinion" !gotcha!

 

[Brian R]

Oh, if you pay cash for something...Then that should be used as well even though it may not have come out of the business account. If you personally pay for something out of your personal account for business...then it should be a write off as well.

With that said....Always pay for anything business out of your business account...Never co-mingle.

 

[Derek]

you're losing me

plz dont make me smarter in this area, ignorance is bliss.

but seriously, i'll just make out a new invoice for the net amount we actually made and pay the gubment taxes on that. that seems the legit way. why would i wanna pay taxes on the larger amount when i didnt net it?

this is only a $20 difference, but i wanna do it legitimately :mrgreen:

 

[Brian R]

Whatever works for you.

 

[hogjowl]

3.5%? Isn't that a bit HIGH?

 

[Derek]

tx for the advice fellas :mrgreen:

3.5 is the fee when i manually type in the numbers. swiping the card is 2.75% with no commitment.

 

[floorguy]

on only the NET are you f'ing nuts

the gross, then you get your write offs....

me: uhhhhhh ok yea i billed $500, but then i did my own right offs and i only netted $50 on that job Mr Irs man

IRS: ohhhh so you claimed what ever then??? You do realize we have a "play" book that shows what you can and cant write off???

Me: well yea i mean gas, food, chem, tires, oil, I have my OWN formula for that so we are good...

IRS: Security, wanna bring them cuffs in here....

You SHOULD be sure your GROSS receipts match your incoming and out going, but if you for one sec get audited and they compare an invoice to a deposit and it starts showing odd things, WITH OUT your proof.....you are in a world of hurt..



soooo the short answer....yes its like any other bank fee, and it is a "cost" associated to biz.....


i just dont even know what to say.... :roll: :roll: :roll: :roll: :roll: :roll: :roll: :roll: :roll: :roll:

 

[Brian R]

Douglas, I was speaking to the net of the invoice after the bank charge...Keep up.

 

[Brian R]

$100 - $3.75 = 96.25 taxed

Without the -$3.75 you get taxes on the $100.....and then you write off the $3.75


It's a wash....One just has more paperwork....for no real reason.




This is not including all your other write offs.

 

[floorguy]

oh well we dont get taxed for service here... 8) 8) 8) 8) 8)

so if my bill is 100...its for a 100

 

[Brian R]

Yeah, I don't get that whole sales tax for services...Here in TX.

But I was talking income tax.