Stripe processing fees belongs on Line 10, commissions and fees.
Why line 10
Stripe keeps a percentage of every charge, so the fee is a cost of collecting the sale, which is what line 10 covers. Report the gross invoice on line 1 and deduct the fee here, because the 1099-K Stripe files reports gross volume, not your net deposit. Netting the fee against income hides both numbers and the return will not tie to the form the IRS already holds. Some preparers instead itemise all card fees on line 27a as merchant fees, which is also accepted; what matters is that you pick one place, deduct the fee once, and stay consistent year to year.
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 Stripe processing fees lands on Line 10 without you sorting it.
Start for freeWhat Stripe processing fees is confused with
- Line 27a, other expenses
- A per-transaction percentage is the classic line 10 item, while a flat monthly charge for the merchant account itself is normally itemised on line 27a.
- Line 23, taxes and licenses
- Sales tax that Stripe Tax collects and remits is a tax on line 23, and only if you included it in gross receipts in the first place.
- Line 18, office expense
- A fixed monthly software charge such as a Stripe Billing plan is an office expense on line 18, not a commission on a sale.
Examples that belong on line 10
- 2.9 percent plus 30 cents on a 1,200 dollar design invoice, 35.10 dollars on line 10
- Stripe Connect application fees withheld from a marketplace payout
- A 1 percent currency conversion fee on a payment from a client in Canada
- A 15 dollar chargeback dispute fee
- Instant payout fees for same-day transfers to your bank
What does not belong here
- A refund you issue a customer, which reduces gross receipts on line 1 instead of being an expense
- The monthly maintenance fee on your business bank account, which belongs on line 27a
- Sales tax remitted for customers if you never reported it as income
- Interest on a Stripe Capital advance, which is business interest on line 16b
The limit that applies
Gross receipts, not net deposits: line 1 plus the fee on line 10 should reconcile to the gross amount on the 1099-K.
What to keep
Keep the Stripe annual summary or the monthly fee reports alongside the 1099-K, since the fee total on those reports is the only support for line 10. Bank deposits will not show it, because Stripe takes the fee before it pays you.
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 |
| Shopify transaction fees | Schedule C, Line 10 |
| Square fees | Schedule C, Line 10 |
| Upwork and Fiverr platform fees | Schedule C, Line 10 |
Related lookups
- Where do client gifts go on Schedule C?
- Where does a business license go on Schedule C?
- Where does printer ink 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 Stripe processing fees lands on Line 10 without you sorting it.
Start for free