Credit card late fees

[oceanlovin'ea]

Are credit card late fees deductible? I know on mortgage interest statements that come at the end of the year, if there were any late fees they are included with the total interest paid on the mortgage.

But penalties for IRS for filing late or paying late are not deductible.

So where does credit card late fees fall?

Thanks

Linda F

[Unregistered]

credit card

same as credit card interest--not deductible --unless use for business

[oceanlovin'ea]

Was speaking of business use

Sorry, I didn't make that clear in my first post. Yes it is a s corp business that i was asking about.

Thanks.

[Matt Sova]

Business interest

Yes the late fee on a credit card for business use is deductible as interest expense.

[skhyatt]

Where a credit card company imposed a one-time charge for cash advances, check advances and overdraft advances made to a cardholder, and a periodic charge for the unpaid balance of such advances, and the charges were not for maintenance, etc. services, both the one-time charge and the periodic charges were interest. Similarly, a credit card company's “over-the-limit” fees (imposed when cardholders exceed their credit limits) and late fees (imposed when cardholders fail to make payments when due) are properly characterizable as interest, so long as, on the basis of the surrounding facts and circumstances, the fees are not actually imposed for services rendered by the credit card company for the cardholders' benefit.

Rev Rul 77-417, 1977-2 CB 60 ; Field Service Advice 200145013