A Roundup of Tax Law Rules for Deducting Interest Payments
Interest rates are on the rise, albeit slowly. Still, individuals and businesses with debt can reduce the cost of borrowing if they can deduct their interest payments.
July 16, 2018 at 11:25 AM
2 minute read
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Determining the Type of Interest
- Personal interest
- Qualified residence interest
- Student loan interest
- Investment interest
- Passive activity interest
- Business interest
Personal Interest
Robinson III, |
Home Mortgage Interest
- For mortgages incurred on or before Dec. 15, 2017: $1 million ($500,000 for a married person filing separately). The limit also applies to anyone with a binding contract by this date to close on the purchase of a principal residence before Jan. 1, 2018, and who does so before April 1, 2018.
- For mortgages incurred after Dec. 15, 2017: $750,000 ($375,000 for a married person filing separately)
Student Loan Debt
https://fred.stlouisfed.org/series/SLOAS https://www.congress.gov/bill/115th-congress/house-bill/3573/text |
Investment Interest
|Passive Activity Interest
|Business Interest
- Business interest income for the year
- 30 percent of adjusted taxable income for the year
- Floor plan financing interest (used by car dealers and certain other businesses)
Conclusion
Sidney Kess , CPA-attorney, is of counsel at Kostelanetz & Fink and senior consultant to Citrin Cooperman & Co.
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