Discussion:Overdraft Fees Not Deductible
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| Revision as of 21:11, 10 September 2009 Waynecpa (Talk | contribs) (Well, if this is) ← Previous diff |
Revision as of 21:24, 10 September 2009 Captcook (Talk | contribs) (Aren't overdraft) Next diff → |
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| {{ForumReplyPost|UserID=Waynecpa|Date=10 September 2009|Text=Well, if this is the case, some of my clients will be missing out on a $5,000 deduction for their poor business management. Granted the fees shouldn't happen, but I can't think of a reason they aren't a cost of doing business (poorly). I want to see the cite of the IRS position also.}} | {{ForumReplyPost|UserID=Waynecpa|Date=10 September 2009|Text=Well, if this is the case, some of my clients will be missing out on a $5,000 deduction for their poor business management. Granted the fees shouldn't happen, but I can't think of a reason they aren't a cost of doing business (poorly). I want to see the cite of the IRS position also.}} | ||
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| + | {{ForumReplyPost|UserID=Captcook|Date=10 September 2009|Text=Aren't overdraft fees actually charges for unapproved loans from the bank? The business needed the money to operate and didn't have available cash on hand, thus the loan from the bank. As all loans, this loan had loan fees. The loan was for such a short amount of time; no interest was charged. The loan fee was properly amortized over the life of the loan (1-3days). Why would this not be a deduction?}} | ||
Revision as of 21:24, 10 September 2009
Discussion Forum Index --> Basic Tax Questions --> Overdraft Fees Not Deductible
Discussion Forum Index --> Tax Questions --> Overdraft Fees Not Deductible
| 10 September 2009 | |
| IRS auditor disallowed bank overdraft fees for a business bank account. Said the IRS opinion is that overdraft fees are the result of poor business management. If the overdraft can be traced to a client, such as the result of a bad check, the overdraft fees would be deductible. Otherwise, the Service considers them to be similar to penalties.
It's not a large amount, but I've seen clients getting hit with high fees, especially as they try to stay afloat in this economy. Thought they were deductible. Any thoughts? | |
| 10 September 2009 | |
| ordinary and necessary doesn't mean that the person made every choice correctly. Do you think the folks at AIG had good business management? But they get to deduct all of their expenses just the same. I'd fight for this one. | |
Death&Taxes (talk|edits) said: | 10 September 2009 |
| Take it up with his or her manager, and ask for a cite in writing where you can find IRS' opinion. I won't comment on 'poor management' being not deductible; it is too ridiculous. | |
Southparkcpa (talk|edits) said: | 10 September 2009 |
| Another auditor with a personal axe to grind. Their personal view is now case law.... just ask them.
Simply ridiculous. | |
| 10 September 2009 | |
| Well, if this is the case, some of my clients will be missing out on a $5,000 deduction for their poor business management. Granted the fees shouldn't happen, but I can't think of a reason they aren't a cost of doing business (poorly). I want to see the cite of the IRS position also. | |
| 10 September 2009 | |
| Aren't overdraft fees actually charges for unapproved loans from the bank? The business needed the money to operate and didn't have available cash on hand, thus the loan from the bank. As all loans, this loan had loan fees. The loan was for such a short amount of time; no interest was charged. The loan fee was properly amortized over the life of the loan (1-3days). Why would this not be a deduction? | |
