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<<For instance: I had a dump body installed in my truck, and I soon will need to have a snowplow & sander installed. I don't have the cash on hand to pay for these items, I've been charging them on a credit card. It's a card in my personal name, not the business (I haven't applied for a business CC because I didn't think they would touch me since my business has been less than successful to date). But it is a clean card. I use it exclusively for business related expenses, no personal. And the business is sole prop...soooooo....

Also, soon I may have to buy (finance) a newer (not new) truck to use, but may have to personally finance the thing as opposed to being ablt to finance it under the business.

Now for the question, Is any of this interest deductible? If it makes a difference I pay the credit card bill out of my business checking account.

I'm not an authority on this kind of tax question. But perhaps we will see how close my reply comes to being accurate.

Once the Feds withdrew the ability to deduct any kind of interest from your taxes, the question of what could be deducted became important, as you've discovered.

Interest paid to finance your business is deductible as a business expense, and you are correct that it's desireable to keep the business purchases and the interest charged clearly related to each other. You can still deduct it if it's murky, but the IRS may make you bleed to prove the issue. If it's straightforward, documenting that the interest went to purchase business equipment is easy.

So I'd say you are doing fine. You can probably deduct 100% of these business investments this year, which might give you a loss and reduce the taxes you have to pay.

God speed and good deductions,

Seattle Pioneer
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