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Q: can I claim credit card finance charges on taxes? ( Answered 5 out of 5 stars,   1 Comment )
Subject: can I claim credit card finance charges on taxes?
Category: Business and Money
Asked by: julie99-ga
List Price: $2.00
Posted: 01 Feb 2004 07:57 PST
Expires: 02 Mar 2004 07:57 PST
Question ID: 302428
Is there a way to claim your interest charges on personal credit cards
on your yearly taxes?   I do not own a business, nor were these
business related expenses.
Subject: Re: can I claim credit card finance charges on taxes?
Answered By: omnivorous-ga on 01 Feb 2004 09:24 PST
Rated:5 out of 5 stars
Julie99 --

First, I'm answering this question assuming that you're in the U.S.
(researchers have no access to any personal information -- not even
e-mail addresses).  Second, note that answers are not intended to
replace qualified professional tax or legal advice.

Surprisingly, IRS publications gloss over credit card interest, both
in the instructions to the 2003 Form 1040 and Publication 535, which
covers deductions in detail.  The Interest section of Publication 535
starts on p. 17.  The most-relevant phrase under "Interest that you
cannot deduct" says that 'you generally cannot deduct personal
Business Expenses (2003)

A much clearer statement from a January, 2003 newsletter of the CPA
firm Ambrosi  Donahue Congdon is on the second page: "Credit card
interest, automobile loan interest and other types of personal
interest are not deductible."
Ambrosi Donahue Congdon
"The Facts on Tax Deductions" (January, 2003)

Of course, this is why homeowners are advised to pay off those
personal loans with home equity loans:
"The Top 10 Overlooked Deductions" (Schnepper, undated)

Google search strategy:
IRS + "credit card interest" + deductions

Best regards,

julie99-ga rated this answer:5 out of 5 stars
precise and thorough! thank you!

Subject: Re: can I claim credit card finance charges on taxes?
From: davecpa-ga on 31 Aug 2004 10:35 PDT
credit card interest may be deductible on schedule a thorough form
4952 investment interst deduction to thwe extent you earn interest or
example:you have a $100,000 cd due yo martutre , 5 year maturity in
march year 1 , while you could break the cd and get $20,000 to spend
you borrow 20,000 on credit cards in january so as not to break the
cd, the credit card uinterest was needed to maintain the investment
threfore deductible subject to 4952 limits. similarly say you had
$98,000 to invest but needed and additional$2000 to get a special rate
on a cd. again deductible subject to form 4952 limits, zThe point is
not only is margin interest deductible on 4952 but also any inerest
used to fund or maintain an investment 4952 limits interst deducted to
interest earned each year with a carry forward
also some interest costs may be capitalized into a cspital investment

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