Solved: I took out a loan of 30k to start a business. This year I made 10k. I am still in debt by 20k. Will I be taxed on the 10K?

I took out a loan of 30k to start a business. This year I made 10k. I am still in debt by 20k. Will I be taxed on the 10K?

posted

You will be taxed on the net profit of the business.

Net profit = Income - expenses.

Interest on the loan is an expense of the business, however, the loan payments are not a deduction just as the loan when taken out is not income.

You will be taxed on the net profit of the business.

Net profit = Income - expenses.

Interest on the loan is an expense of the business, however, the loan payments are not a deduction just as the loan when taken out is not income.

I took out a loan of 30k to start a business. This year I made 10k. I am still in debt by 20k. Will I be taxed on the 10K?