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After you file
In general, consumer loan interest (personal loan) is not tax deductible.
Did you get a home equity loan to pay for the solar panels? If so, yes. The interest is deductible.
- Only if the loan is secured by your home (such as home equity or other mortgage) the interest would be deductible as a home mortgage interest.
- Some lenders, when offering a mortgage loan, include a range of home improvements in the loan, such as solar panel systems. Since the mortage is secured debt (by your home) the interest would be tax deductible.
Per Tax Topics - Topic 505 Interest Expense - IRS.gov
Types of interest deductible as itemized deductions on Form 1040, Schedule A (PDF), Itemized Deductions, include:
- Investment interest (limited to your net investment income) and
- Qualified mortgage interest including points (if you're the buyer); see below.
Types of interest not deductible include personal interest, such as:
- Interest paid on a loan to purchase a car for personal use.
- Credit card and installment interest incurred for personal expenses.
- Points (if you're a seller), service charges, credit investigation fees, and interest relating to tax-exempt income, such as interest to purchase or carry tax-exempt securities.
‎June 6, 2019
5:17 AM