Finance Guide Center

Can I deduct ongoing finance charges for business expense?

Can I deduct on Schedule C in one year the finance charges that occurred in that year from business expenses made in earlier years? For instance, I am still paying finance charges on unpaid credit card charges for large business expenses from several years ago. Can I report those finance charges as interest paid for the current year? Thanks!

Public Comments

1. Depends. Are you on the cash or accrual accounting method? If you are on the cash basis, you take the expense when you actually pay it. If you are on the accrual method, you take the expense when you incur it, regardless of when it's paid. Of course, this only applies to BUSINESS accounts. The interest on personal debt is not deductible aside from home mortgage interest.