Shopify transaction fees belongs on Line 10, commissions and fees.
Why line 10
Shopify Payments takes a percentage of each order, and Shopify adds a transaction fee when you route payments through an outside gateway; both are costs of making the sale and belong on line 10. The monthly Shopify plan is different in kind, because it is a subscription you owe with zero sales, so most preparers put it on line 18 or itemise it on line 27a. Keeping the per-order cut apart from the fixed plan fee is what makes both numbers easy to defend.
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 Shopify transaction fees lands on Line 10 without you sorting it.
Start for freeWhat Shopify transaction fees is confused with
- Line 18, office expense
- If the charge is the same whether you sell nothing or a thousand orders, it is a subscription on line 18; if it scales with sales, it is line 10.
- Line 8, advertising
- Shopify Audiences and any ad spend billed through Shopify is advertising on line 8, even when it appears on the same invoice as your fees.
- Line 27a, other expenses
- Shipping labels and fulfilment charges bought through Shopify are shipping costs, itemised on line 27a or included in cost of goods sold, not selling fees.
Examples that belong on line 10
- 2.9 percent plus 30 cents on a 90 dollar order through Shopify Payments
- The extra percentage charged for using an outside gateway instead of Shopify Payments
- A 1 percent Shopify Markets currency conversion fee
- Shop Pay Installments merchant fee on a financed order
- A 15 dollar chargeback fee
What does not belong here
- The monthly Shopify plan, which is software on line 18
- Paid themes and apps, which are software or a capitalised asset depending on life
- Sales tax Shopify Tax helps you collect and remit
- Inventory you bought to fill orders, which is Part III cost of goods sold
What to keep
Export the Shopify Payments payouts report for the full year: it shows the fee charged on every order, which is the support for line 10, and it reconciles to the 1099-K.
Other expenses on line 10
| Expense | Line |
|---|---|
| a real estate commission split | Schedule C, Line 10 |
| Amazon seller fees | Schedule C, Line 10 |
| App Store and Google Play commission | Schedule C, Line 10 |
| Etsy fees | Schedule C, Line 10 |
| pay-per-lead fees from Thumbtack, Angi or Yelp | Schedule C, Line 10 |
| PayPal fees | Schedule C, Line 10 |
| referral fees you pay | Schedule C, Line 10 |
| sales commissions you pay | Schedule C, Line 10 |
| Square fees | Schedule C, Line 10 |
| Stripe processing fees | Schedule C, Line 10 |
| Upwork and Fiverr platform fees | Schedule C, Line 10 |
Related lookups
- Where does printer ink go on Schedule C?
- Where does Google Ads spend go on Schedule C?
- Where do client gifts go on Schedule C?
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 Shopify transaction fees lands on Line 10 without you sorting it.
Start for free