Can I Deduct bank fees such as Late fees as an expense on my corrporate taxes.?

Question

Can fees paid to banks and credit card companies for late fees be deducted as an expense on my S corp taxes just like the normal bank fees?

Answer 1

Those late fees are not deductible.  However don't be alarmed if a couple of hundred people tell you they did and nothing happened.  The likely hood of the IRS detecting that error is rather slim.  But don't tell them that I told you so.

Answer 2

Take a look at the loan agreement.  If the late fee is treated as an extra interest payment for the extra time you had the money, then the late fee is an interest expense.  If the loan is a business loan, the interest is a deductible business interest.

So the deduction would not be taken along with the normal bank fees, it would be interest expense.

Answer 3

No, late fees aren't deductible.