Whose credit card fees can be deducted?

The IRS has announced that taxpayers who used a credit or debit card to pay taxes last year may be eligible for an additional deduction on their 2008 return. 

It has also been announced that, although the fees vary, average 2.5% of the tax payment will be charged directly by the card payment processor to the taxpayer, as federal law blocks the IRS from paying fees associated with the transactions. 

The group of tax payers who will be eligible for deduction is those who itemize. Moreover, the value of miscellaneous deductions, including the credit card fees, unreimbursed employee expenses, tax preparation fees, union dues, safe deposit box fees, legal fees and other items are deductible only to the extent they exceed 2% of adjusted gross income. 

Those who used a credit or debit card to pay this year’s taxes must wait to deduct the fees on their 2009 income tax return, due April 15, 2010. And those who used a payment card to pay taxes last year can find out their eligibility to the deduction till Wednesday, April 15.