Tax Write Offs: Paypal Fees

It seems like every client these days wants to pay me via Paypal, which, unfortunately, takes a nasty little bite out every payment. While a dollar here and 75 cents there doesn’t seem like much, it adds up pretty quickly. The thought of just plain not getting my full rate just peeves me. But there is a bit of a solution. It doesn’t put the cash back in my wallet, but it does mean that, down the road, I’ll have a bit more.

Because these Paypal fees are a necessary cost of doing business, I can write them off on my taxes. All I have to do is add up the total I spent on fees and put it on my itemized deduction.

It’s like finding a handful of spare change in the couch cushions — you thought that you’d lost the money, but after just a minute of digging, you get it back.

Please consider submitting this page to bookmarking sites by clicking the ‘Bookmark’ button below.

8 Comments

  1. wordsmith   •  

    It is a pain to find the spare change in the Pay pal cushions so to speak–you could add a surcharge for Pay pal payments over a certain limit as an alternative. Just a thought. :)

  2. Thursday   •  

    It sort of boils down to how much Paypal business you’re doing, especially since most clients seem to see Paypal as a convenience they’re offering you — rather than the other way around.

  3. Soccer Mom   •  

    Paypal does make things convenient, but with a price. That’s for sure. I never thought of claiming the fees as a business expense. I’ll mention it to my accountant.

    ~Mary

  4. Thursday   •  

    It’s a little thing, but those little things sure do add up.

  5. Mary "Lynn" Lewis   •  

    This is great information to know. And I suppose it goes right along with something most people don’t know, when you get a tax refund, the government is not giving you a gift, it was your money when you paid it in, and it’s still your money when it’s returned to you.

  6. Melanie Avila   •  

    I don’t have enough freelance business to warrant a paypal account, but the tax write-off is a wonderful suggestion.

  7. Kathleen Frassrand   •  

    This is AWESOME advice! I never would have thought of writing off my paypal fees. Of course, the downside is that I use the same paypal account for my E-bay transactions.. so I’d have to edit those out. It might be more trouble that it is worth for this year.. but starting Jan. 1 I’m going to keep a running total of the fees for writing. If I do it as they come in, I’ll have the number at hand for next years taxes.

    Thanks again for this GREAT tip!

  8. Rebecca Laffar-Smith   •  

    Fantastic Advice, Thursday! It’s easy to miss the little things that add up. I’m always peeved by the fees too. My exhusband pays his Child Maintenence into my paypal account so ever week I loose $7. That’s about $300 a year. It’s not a big enough deal to complain about but it’s $300 that could go towards much needed purchases, bills and the mortgage.

    When it comes to income from freelancing however the idea of writing off the expense is a brilliant one. I’ll make sure to add it to my books!

Leave a Reply

Your email address will not be published. Required fields are marked *