ATM Fees & Taxes: What You Need to Know

If you’re like most small business owners, you probably have a good idea of the big-ticket items like your home office and vehicle expenses. But what about those smaller write-offs that can save you money and help your bottom line? Many small businesses miss out on valuable tax deductions because they don’t know what’s allowed and what isn’t. So you may ask, are ATM fees tax deductible?

Well, the IRS allows businesses to deduct any ATM fees they incur for making deposits or withdrawals from their bank accounts. You can also deduct any fees you incur using another bank’s ATM.

Types of ATM Charges

You’ll often be charged a fee when you use a bank’s ATM. And while some banks don’t charge any fee, provided you use their machines, some may charge a fee even if you’re using one of their machines. Typically, there are two common types of fees for using ATMs. These are:

● Surcharge: This is a fee your bank charges when you use their own or another bank’s ATM. You’ll see this fee listed on your monthly statement. Surcharge fees may or may not include transaction fees, withdrawal fees, or balance inquiry fees.

● Convenience fee: This is a fee charged by the business (ATM owner) where you make your transaction. The amount varies depending on the business and may be listed on the machine or their website.

Are ATM Fees Tax Deductible? Understanding Small Business Tax Write-Off

ATM fees and other bank charges are tax deductible for business accounts, but they’re often overlooked. Like any other business expense that is ordinary and necessary for your trade or business, the IRS allows you to deduct the amount you are charged directly by the financial institution that owns or operates the ATM.

The ATM fees vary widely by bank, but most range between $2 and $3 per transaction. Some banks also charge monthly fees for using additional services like check cashing or money orders; these fees range from $5 to $20 per month and can be waived with certain accounts. These fees are often waived if you’re a loyal customer with a checking account at that particular financial institution. Some banks also charge additional fees on top of those mentioned above if you use their ATM outside their network.

It’s worth noting that the IRS uses specific rules to determine whether your ATM and bank charges are tax-deductible. First, the fees must be ordinary and necessary to your business or work. Secondly, they should happen only on your business bank account. That means any fees on your personal account, even business-related, won’t qualify for deductions. However, they will still qualify if they are on a separate business account.

Get Help Today

The tax laws are complicated, and there are many of them. The IRS publishes several tax deductions and credits for small businesses that may apply to your situation. Unfortunately, these deductions are not always easy to find or understand, especially if you don’t have any background in accounting or finance. Even if you have experience in these areas, it’s easy to get confused by all the jargon and legalese that comes with tax law. But if you’re going to make your business profitable, you need to know all applicable tax deductions and credits you’re eligible to use.

If you’re looking for guidance on how best to take advantage of all the available deductions available to your business, consider hiring an accountant or tax advisor who can help you navigate the entire tax process. Our team at Gurian CPA Firm is ready to help. Contact us today – we’d love to learn more about your small business tax needs.

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