Credit card interest is tax-deductible, but only if the charges that accrued interest were business expenses. Is credit card interest tax deductible if the charges were personal expenses? Unfortunately, no.
To deduct credit card interest, these qualifications must be met:
- The charges on the card must qualify as business expenses according to IRS rules.
- You must be responsible for the debt.
Small business expenses and tax deductions are often closely related, and credit card interest on business expenses isn’t the only interest that’s tax-deductible. You can also claim interest paid on small business loans as a tax deduction. If you take out a small business loan to access working capital or invest in new equipment, for instance, the interest you pay can be subtracted from your taxable income.
Though whipping out the credit card can be a quick way to purchase what you need, you may eke out more favorable terms by working with a small business lender that can get to know your business personally.