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Credit Card Fees to Pay Taxes are Deductible

Categories Tax Tips (Fed)
Credit or debit card convenience fees charged for paying federal individual income taxes electronically are deductible for those taxpayers who itemize. Credit card processors normally charge taxpayers a convenience fee when they use their credit or debit card to pay taxes.  Fees vary, but average about 2.5 percent of the tax payment.In reassessing a previous position, the IRS decided that the convenience fees associated with the payment of federal tax, including payment of estimated tax, can be included as a miscellaneous itemized deduction subject to 2 percent of the taxpayer’s adjusted gross income

Note that credit card fees associated with tax payments are higher than fees charged for other credit card charges.  Also note that many taxpayers will not qualify for the deduction based on the 2% phase out.  If you are in doubt contact your tax professional.

 

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