Are Service Fees Tax Deductible?
What Is A Service Charge?
A service charge is an amount added to the customer’s bill for the service provided by a particular business. These charges are of various types and hence vary by industry. For example, packaging costs, delivery costs, and per-transaction fees are all examples of service charges.
Are Service Fees Tax Deductible?
Yes, you have to pay tax on service fees because they are considered taxable income by the Internal Revenue Service (IRS). These service fees must be visible and are supposed to be shown by the end of the year.
Are Service Fees Taxed Similarly To Regular Income?
Service fees are taxed the same as regular income, as the IRS considers it a form of income. Hence it is mandatory to pay FICA tax and Federal income tax on these incomes.
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