People often ask: Is the interest paid during the year deductible on my federal income tax return? The answer is, “It depends.” Generally, the interest you incurred must be allocated among the following five “baskets” for tax purposes. Based on how the interest is classified, it may be nondeductible, partially deductible or fully deductible. Other special limits also may apply.
For More Information
With so many categories of interest expense, it’s sometimes hard to keep track of the current tax rules. If you have any further questions regarding the tax treatment of interest expenses, contact us.