Can I deduct bank fees such as late fees as an expense on my corporate 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

They can if you are on accrual basis. Then, the deduction applies, if they are on cash basis. They can be deducted when they are paid from the bank. It's a little hazy as to when the actual expenses are paid with cash, so most of the time, if you have the liability set up on your balance sheet, you can deduct them on cash basis during the current tax period. If you fail to pay your credit card debt, then it would obviously count as income to you the next year.