topic Business interest deduction in Self employed

Business interest deduction

4wheeldriveparts — Thu, 13 Dec 2018 06:34:17 GMT

My business partnership purchased a piece of equipment in 2018. With the new tax laws changing, I understand that I can write off the whole price. However I am on an installment plan for 5 years, can I write the whole interest on the item or just what interest I pay each year?

Re: Business interest deduction

MargaretL — Thu, 13 Dec 2018 21:08:04 GMT

You cannot deduct the whole interest amount.

If your partnership is on the cash basis, you can deduct only the interest you actually paid. If your business is under the accrual method, you can deduct only the interest amount that has accrued during the tax year.

Re: Business interest deduction

4wheeldriveparts — Thu, 13 Dec 2018 23:54:45 GMT

Okay. That is what I thought. I just wanted to make sure. Thank You!

Re: Business interest deduction

MargaretL — Fri, 14 Dec 2018 16:07:57 GMT

My pleasure, Good luck in 2019!