Can you deduct interest on credit cards

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While personal credit card interest can't be deducted, there are other types of interest that you may be able to deduct. Interest on a home-equity loan is generally tax-deductible when used to buy, build, or improve your home. Unfortunately, when you use the loan to pay down credit card debt or for other personal living expenses, the interest you paid is no longer tax-deductible.

However, you may be able to deduct credit card interest paid on qualified business purchases, no matter what type of credit card you use. Consult with a tax professional about your tax situation to get specific advice about whether the interest you paid is tax-deductible. Internal Revenue Service. Accessed March 22, Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content.

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Apply market research to generate audience insights. Measure content performance. When you prepay interest, you must allocate the interest over the tax years to which the interest applies.

You may deduct in each year only the interest that applies to that year. However, an exception applies to points paid on a principal residence, see Topic No. Types of interest deductible as itemized deductions on Schedule A Form , Itemized Deductions include:.

Qualified mortgage interest includes interest and points you pay on a loan secured by your main home or a second home. Your main home is where you live most of the time, such as a house, cooperative apartment, condominium, mobile home, house trailer, or houseboat.

It must have sleeping, cooking, and toilet facilities. You can also treat amounts you paid during the year for qualified mortgage insurance as qualified home mortgage interest. The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after A second home can include any other residence you own and choose to treat as a second home. You don't have to use the home during the year. However, if you rent it to others, you must also use it as a home during the year for more than the greater of 14 days or more than 10 percent of the number of days you rent it, for the interest to qualify as qualified residence interest.