Have client that is charged 1% check cashing fee on check that is received from out of town company. This is to cover charges of clearing the check, then he has to wait a few days pending approval in order to obtain his payroll for the following period. I do prepare a 2106 on him as he gets per diem rate. This appears to me to be deductable on the 2106. Correct? Thanks.
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Is this a payroll check?
If so, wouldn't a check-cashing fee be a personal expense?Evan Appelman, EA -
Is it the Bank that is charging this fee - or is it a "Check Cashing" Facility. Normally the Bank does not charge if the T/P has an account - they just make them wait an extra few days before Funds are available.
Have the Out of State Payee set up a "Direct Deposit"
I deposit "Out of State" Funds all the time, and my Bank never charges for them.
Agree if it is a payroll Check - then most likely should be treated as a non-deductible personal expense.
If T/p is receiving under a "Business" as in Invoicing and receiving Funds from various Vendors, then maybe I might consider a Bank Fee.
SandyComment
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It probably depends on if this is a local truck driver or interstate. If it is just a check-cashing fee I agree that this is probably non deductible. However, long-haul truck drivers have no way to go to their bank and get the cash from their payroll checks, only when they are home. I always considered the ATM fees incurred on the road a deductible expense. But in a way these fees are similar to check cashing fees.Comment
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It would seem to me that even if he is away on the road for quite a few days, then he still cannot deduct "personal" charges for the cashing of his paycheck. It just wouldn't fly with the IRS in my estimation. Maybe he could find some lower cost way to get his pay, such as direct deposit of payroll?Comment
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