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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1496
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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The Square is a fairly new way to take credit cards over the

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The Square is a fairly new way to take credit cards over the phone. They deduct their fees before depositing the amount of purchase into my bank account. I say these fees are deductible the same way a bank merchant account is a deductible business expense and claim the entire sale as income, but an acquaintance says these fees are not deductible and I should only claim the income deposited in my account, minus fees.

Arthur Rubin :

Thank you for using Just Answer.

Arthur Rubin :

I agree with you; as the fees are associated with the individual transactions, they are deductible. If in a "hobby", the question of whether they should be netted or deducted separately is relevant.

Customer:

So, it doesn't matter if the fees are deducted before deposit or if they are charged through a bank? Processing fees are processing fees.

Arthur Rubin :

Sorry, let me rephrase. In the case of a business, it almost always doesn't matter whether you report the gross income, and deduct the fees, or whether you report the net income.

Customer:

Thanks!

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