Im Self employed. Bought a business with a loan. I know the interest payments are deductible. Do the Principle payments reduce my taxable income?

sdbish · ‎June 6, 2019

MinhT · ‎June 6, 2019

No, the principal repayments of the loan are not tax deductible. They do not reduce your taxable income. They only reduce the balance due in the loan.

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sdbish · ‎June 6, 2019

Bummer. So as an example if I had income (after deductions) of 100,000, in 2018 but I paid 50,000 of the loan principal I am going to be taxed on the 100,000.

MinhT · ‎June 6, 2019

Unfortunately, yes. You can only deduct the interest portion of the loan repayments.

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Im Self employed. Bought a business with a loan. I know the interest payments are deductible. Do the Principle payments reduce my taxable income?

Get your taxes done using TurboTax

Get your taxes done using TurboTax

Get your taxes done using TurboTax