Credit card annual and late fees belongs on Line 27a, other expenses.
Why line 27a
An annual fee, a late fee, a cash advance fee or a foreign transaction fee is a charge for a service or a penalty for your timing, not a cost of borrowing over time, so it is not interest and does not belong on line 16b. These go in other expenses on line 27a, itemized in Part V under a heading such as bank and card fees. They are still fully deductible when the card is used for business.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so credit card annual and late fees lands on Line 27a without you sorting it.
Start for freeWhat credit card annual and late fees is confused with
- Line 16b, interest, other
- Interest accrues on a balance over time, while a flat fee for holding the card or paying late does not, so the interest goes on 16b and the fee on 27a.
- not deductible, not deductible
- Fees on a personal card, and fees on the personal share of a mixed card, are not deductible.
Examples that belong on line 27a
- A $95 annual fee on a business rewards card
- A $39 late payment fee on the business card
- $62 of foreign transaction fees on a trip to a supplier
- A $15 monthly maintenance fee on the business checking account
- A $10 cash advance fee on a draw used for business
What does not belong here
- Line 16b, since none of these are interest
- Fees on a personal card used for personal spending
- Interest, which has its own line and should not be merged into the fee total
What to keep
Keep the statements showing each fee separately from interest. Part V wants a label and an amount, so a running fee total by category is enough.
Other expenses on line 27a
| Expense | Line |
|---|---|
| a background check | Schedule C, Line 27a |
| a branded gift for a client | Schedule C, Line 27a |
| a business coach | Schedule C, Line 27a |
| a conference registration fee | Schedule C, Line 27a |
| a hot-desk day pass | Schedule C, Line 27a |
| a payroll service | Schedule C, Line 27a |
| a professional certification renewal | Schedule C, Line 27a |
| a stock photo license | Schedule C, Line 27a |
| a telephone answering service | Schedule C, Line 27a |
| a trade show booth fee | Schedule C, Line 27a |
| a translation service | Schedule C, Line 27a |
| an online course | Schedule C, Line 27a |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so credit card annual and late fees lands on Line 27a without you sorting it.
Start for free