Late fees

[MargaretMort]

Are late fees deductible? Client buys equipment, financed by a loan agency. Late payment equal additional fee. Interest is deductible, of course, but can't find anything about late fees.

Thanks. MM

[michaelmars]

YES

[kcjenkins]

Yes, because the 'late fee' is basically just extra interest charged for the delay in receiving the payment. If you owe me money, and the regular interest on the debt is $.50 a day, and you are ten days late paying me, and I charge you an extra $5 'late fee' haven't I just kept myself even?

[MargaretMort]

I thought so but couldn't find anything that referred to it except for late fees for mortgage payments. thank you very much. MM