Is credit card interest tax deductible?
Interest on business purchases is deductible. Interest on personal spending is not, even on the same card.
The rule
Interest follows what the money was spent on. Carry a balance from business purchases and the interest is a business expense; carry one from personal purchases and it isn’t.
A card used for both makes this hard to prove. A separate card for the business keeps it clean.
Interest on a business loan or line of credit is deductible the same way, and so is the business share of interest on a car loan if you are self-employed.
$42 of interest on a balance that is all business is deductible in full.
Priced at 36¢ on the dollar, the rate of a $95,000 sole proprietor in California. Work out yours.
- Where it goes
- Schedule C line 16b, other interest
- What to keep
- Statements that show which purchases the balance came from.
Checked on September 25, 2026 against Publication 334, Tax Guide for Small Business and Instructions for Schedule C. An estimate for your records, not tax advice.
See it on every receipt.
Snap it and Reimburse files it on the right Schedule C line, takes the deductible share and shows what it puts back.