How to Account for PayPal Fees on Schedule C

1. Total all the business-related fees you paid PayPal during the tax year for which you are preparing the Schedule C.
2. Type the total PayPal fees in Part V of Schedule C under 'Other Expenses.' Describe the expense as PayPal service charges.
3. Add all the separate expenses you listed in Part V of Schedule C. Write the total on lines 48 and 27 of the form.
4. Deduct your total business expenses from your total business earnings. Write the profit or loss on line 29 of Schedule C. Use that information to complete IRS form 1040.