Can I deduct business credit card interest?
Short answer
Yes, interest on a credit card used for business purchases is generally a deductible business expense, but interest on personal spending isn't, so a card used for both needs the business share split out.
Otavio Mayole, Co-founder, DeCypher FinancialsUpdated
What counts:
- Interest on a business card used only for business: generally deductible
- Annual fees on a business card: generally deductible
- Interest on a mixed card: only the share tied to business spending
- Interest on personal spending: not deductible
This is a write-off we often find missing on self-filed returns.
Two honest points:
- A deduction doesn't make debt cheap. If you're paying 20%+ interest, paying the card down usually saves far more than the write-off. We often make high-interest debt the first priority on a financial analysis.
- Keep one card for business. It makes the interest easy to deduct and keeps your LLC's finances separate.