Bank fees belongs on Line 27a, other expenses.
Why line 27a
Schedule C has no banking line. Service charges on a business account are ordinary and necessary costs of being paid and paying suppliers, so they are listed by description in Part V and the total carries to line 27a. Put them on one Part V line called bank service charges rather than scattering them. Only fees on an account the business actually uses qualify, so a personal checking fee stays out even if a business bill was paid from it.
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 bank fees lands on Line 27a without you sorting it.
Start for freeWhat bank fees is confused with
- Line 10, commissions and fees
- Fees a processor takes out of a customer payment, Stripe or Square for instance, are commissions and fees on line 10, while the bank's own charges for holding and moving money are line 27a.
- Line 16b, interest, other
- A finance charge computed on a balance you owe is interest on line 16b, so an overdraft interest charge is interest while the flat overdraft item fee is a bank fee.
Examples that belong on line 27a
- $15 monthly maintenance fee on a Chase business checking account
- $30 outgoing domestic wire fee on a supplier payment
- $45 international wire fee to pay a developer in Poland
- $36 of 3% foreign transaction fees on a $1,200 charge billed in euros
- $35 returned deposit item fee when a client cheque bounced
- $12 stop payment fee
What does not belong here
- Card processing fees from Stripe, Square, PayPal or Shopify, which are line 10.
- Interest on a business credit card balance or a line of credit, which is line 16b.
- Fees on a personal account, even in a month when it paid a business bill.
- A credit card annual fee on a personal card used occasionally for work.
The limit that applies
There is no cap and no percentage limit. On the cash method you deduct the fee in the month the bank took it, which is the month it appears on the statement.
What to keep
The monthly bank statement is the whole record: each fee shows with a description and a date. Download the statements rather than relying on the online view, since banks age out old months.
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 bank fees lands on Line 27a without you sorting it.
Start for free