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February 24, 2025
Question

How to account for surcharge income

  • February 24, 2025
  • 2 replies
  • 57 views

When we charge a customer and they use certain cards it charges them a surcharge on my books Will this income just go in my non taxable income? Thanks. 

2 replies

FishingForAnswers
Level 4
February 24, 2025

@Strands of love   Theoretically, it should be treated as regular income, not that it hurts you any.

 

While you do receive the surcharges, I expect your merchant service provider takes the surcharges back out for themselves later as part of your Merchant Account Fees.

 

So, it washes out. $100 in fee income versus $100 in merchant fees equals $0 profit, effectively.

February 24, 2025

Yes we just pay it back to the bank and it goes under bank charges and fees they automatically pull it from our bank account