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Join nowLOL, maybe you are the one that needs to take an accounting course. Big difference between a tax deduction and a tax credit buddy.
Elipey, I'll send all my credit card fees if you are looking for a write-off, sounds great. Do you work for Visa or Amercian Express ?
I work for neither I owned an ecommerce business for many years and anyone in business knows that all fees are deductible. Let me know the name of your business and I will advertise to your customers that you are double dipping. Not a good practice and I personally will not patronize a business that charges cc fees.
Now you are splitting hairs. Cc fees are ordinary and necessary expenses directly associated with the operation of your business. When you accept credit card payments from customers, you can deduct the fees charged by the payment processor or merchant services provider, reducing your taxable income and increasing tax savings
A tax write-off doesn't mean free money. You might get some money back but not 100%.
You are saving your tax rate. If you buy something for 100 and your tax rate is 25% you are saving $25.
You are still paying $75 for the item.
I don't understand your angry tone and 6 replies either. Let's keep things civil.
Cc fees and any other type of fees, postage, etc are cost of good sold. If you sell a widget or provide a service for $20 and pay a fee whether it be to Amazon, eBay, cc or anyone else for $2.00 then your net sale is $28
As far as my impatience, folks who use Quickbooks should know this or get help from an expert who knows As a consumer, I am tired of seeing businesses trying to pass off fees to me that they are writing off at the end of the year. I have highly considered putting a full page ad in the newspaper so that the public is aware of what is going on
if a business margins are not acceptable, then raise your prices. your prices. Don’t try to underhandedly receive more money by charging bogus fees. Enough said on this subject
Your suggestion of charging higher prices is what we are trying to avoid. If we charge everyone 3 percent more we are gouging the folks paying with cash, check, or ACH.
The net effect of passing through a credit card fee is 0. There is no double dipping going on here.
Sorry can't just accept "Enough said on this subject" because its too fun correcting your incompetence. If I understand your math, $20 price plus $2 fee = $28 net sale? Hmmmm......
I'm in Florida where services aren't taxed like goods. I'm a service based business. Some invoices can be $10K, so to lose $300 for no reason, is a huge hit. If I raise my rates by 3%, I can lose business. Also, there are methods of payment that do not charge a service fee, like a good old fashioned check for example. What I and other entrepreneurs here are saying is, though we could raise our prices wholesale across the board to account for the 3% loss, what we'd prefer to do is give our clients/customers the option of paying one rate for the convenience of using CC payment or receive a discount if they choose to use something like a check to pay.
I hear you Benny but I’m not sure how else I can say it. If you make $100,000 this year in service fees and all of them pay by credit card and the credit card company charges you $3,000 in fees (3%) then when you pay taxes to the IRS, your net income is not $100,000 dollars but $97,000. Credit card fees are a cost of doing business, along with other types of charges and 100% come off off your gross sales.
In Quickbooks, it was listed as an expense titled “Professional Fees”. Since i was in the e-commerce business, i had several fee categories under that.
it is a credit card world. By charging fees for something that you will not have to pay for at the end of the year, you lose customers for no reason. Just easier all the way around both for your customer, you, and your accountant
The reason why the math was messed up is the forum kept crashing so by the time I copied and pasted it and it accepted it, I’m surprised it made since at all. Bottom line take a small accounting course. It will benefit you and the aah moment will come
Oh yes there is. If you charge your customer a cc fee and then take it off of your taxes, you are double dipping. Take a quick accounting course. The light bulb will go off. Just simple math in the end. IRS gross and IRS net
Not all businesses are 100% credit card. I’m glad this worked for your business but different payment types have significantly different fees. Even if this was offered as an automated cash/check discount, we could mark up prices and it could serve a similar purpose.
This is not an attempt to gouge customers. It is an attempt to allow customers to make that choice without impacting our bottom line.
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