It’s that time of year again…some of you may have already done it but most of us will be scraping by on April 17th to get something filed with the IRS. Yep, it’s tax season! Filing your taxes correctly is essential to maximizing your tax deductions and to avoid any future problems should the IRS audit you later. The key to either paying the least amount of taxes or in maximizing your refund is to maximize your deductions. The question that is coming up now in tax season is, is the interest that I have paid on my credit cards tax deductible? The answer to the question is yes and no. For your personal returns, IRS Regulation 505 states that interest paid on a credit card is “personal interest” and not deductible.
However, if you own a small business, you may want to consult with your tax advisor to see if you can deduct some of the interest paid on the credit card as a business expense. In either case, if in review of your finances you are astounded at the amount of interest paid to your credit cards this past year, it may be time to get rid of that liability by speaking with a debt settlement attorney. A debt settlement attorney can help negotiate a reduction in debt owed, stop the mounting interest from compounding each month, and get you debt free so that next tax season, you will not have to ask yourself this same question.