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

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

 
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MinhT
Expert Alumni

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

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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MinhT
Expert Alumni

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

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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**Mark the post that answers your question by clicking on "Mark as Best Answer"

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sdbish
New Member

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

 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
Expert Alumni

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

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