May 19, 2023

Is business credit card interest tax-deductible?

Jump to sections
Spending made smarter
Easy-to-use cards, spend limits, approval flows, vendor payments —plus an average savings of 3.5%.
Get fresh finance insights, monthly
Time and money-saving tips,
straight to your inbox
Thanks for signing up
Oops! Something went wrong while submitting the form.

Tax deductions are important tools that can reduce your company’s overall tax burden. When you take advantage of them, it becomes easier for your company to achieve profitability.

But the U.S. tax code is complex, leading most people to ask themselves, “Can you write off credit card interest?”

After all, you shouldn’t have to pay taxes on revenue you use to cover the cost of doing business, and interest on business purchases is a cost of doing business. So is business credit card interest tax-deductible? Read on to learn the details.

Is business credit card interest tax-deductible?

You can deduct credit card interest for your business, but you may not be able to deduct all of the interest you pay on your business credit card. You can use only the interest charged on the percentage of your balance that was generated through business purchases as a tax deduction.

However, if you’re unable to keep your business credit and personal credit separate, you’ll need to keep track of what portion of your balance was the result of business purchases. As you use your credit card, make notes of which purchases were made for business purposes and which purchases had personal intentions. Then, when it’s tax time, you’ll be able to write off the percentage of the interest you paid that’s directly related to your business purchases.

When is credit card interest tax-deductible?

Your credit card interest is deductible anytime that interest is the direct result of a business purchase. Such purchases include:

  • Travel: This includes any interest on purchases like fuel, airfare, hotel stays, food, and other travel-related expenses you incur as a result of your business operations.
  • Entertainment: You can deduct interest rates for entertainment purchases—that is, as long as the entertainment was for business purposes. This includes things like taking your employees or clients out to dinner and a show.
  • Office supplies: Any interest paid on balances that are the result of office equipment purchases can be written off.

When isn’t credit card interest tax-deductible?

You cannot write off any interest relating to personal purchases. For example, if you need to go to the doctor and don’t have the personal capital available to cover the bill, you may swipe your business credit card. Interest you pay on this portion of the balance isn’t deductible.

Also, keep in mind that there are tax breaks for personal expenses like student loans. However, if you pay your student loan off with your business credit card, this counts as a personal purchase.

As such, the interest you pay on that portion of the balance is not tax-deductible. So be sure you don’t trade debt with tax-deductible interest for debt that isn’t tax-deductible.

How to claim business credit card interest as a tax deduction

Follow these steps to claim your business credit card interest as a deduction on your tax return.

Keep your receipts

Your credit card statements may be enough to justify your business expenses, including interest, but that’s not always the case. The Internal Revenue Service may decide that there’s not enough information on your credit card statement to determine whether the expenses were for your business or for personal reasons.

To alleviate any headaches associated with this, keep all of your receipts—or use a platform like Ramp, which automatically logs receipts and categorizes expenses for you.

Determine what portion of your interest is tax-deductible

You can deduct only the portion of your interest that was the direct result of business expenses. If you use your business credit card only for business expenses, you can deduct 100% of your interest. If not, you’ll need to do some math to determine what portion of your interest is tax-deductible.

Let’s say you have a $10,000 balance. This balance consists of $7,500 in business purchases and $2,500 in personal purchases, and you paid a total of $2,000 in interest on the balance during the tax year.

In this case, 75% of the balance is business-related, meaning that 75% of the interest you paid is tax-deductible. That works out to $1,500 in tax-deductible interest.

If you’re not 100% sure of the percentage of your interest that you can deduct, consider reaching out to a tax professional.

File the proper forms

Finally, when you file your tax return, it’s important to file the right forms to claim your deductions. The forms you use to log these deductions depend on the type of business you have:

  • Independent contractors without a separate business entity: Log your credit card interest on line 16b of Schedule C. You’ll file this with Form 1040.
  • Partnerships and limited-liability companies: Partnerships and LLCs typically report credit card interest on line 15 of Form 1065.
  • S corporations: S corporations log credit card interest deductions on line 13 of Form 1120-S.

Get Ramp to simplify your expense management and tax deductions

Taxes are a complex topic, but they don’t have to add stress to your workday. Consider signing up for Ramp. Ramp is a modern type of spending account that automatically logs your receipts, categorizes your spending, empowers your employees, and integrates with your favorite accounting platform to take the headaches out of money management and tax deductions.

Content Marketing Manager, Ramp

Richard Moy is an experienced freelance Content Marketing Manager supporting Ramp. Prior to joining Ramp, he served as a content marketer and editor at BetterCloud and Stack Overflow.


How much credit card interest can a business deduct on its taxes?

There is no limit to the amount of interest you can deduct as long as the interest you paid was the direct result of a business expense.

Can all credit card purchases made by a business be tax-deductible?

Many small-business owners and entrepreneurs use their business credit cards for personal expenses. In these cases, you can’t write off the portion of the business credit card interest that’s related to personal expenses. You can deduct only the portion of the interest that’s the direct result of a business purchase.

What documents are required to claim credit card interest as a tax deduction for a business?

You’ll need your credit card statements to prove the interest you were charged was related to a business expense. It’s also a good idea to keep receipts for all business purchases just in case the IRS says there’s not enough information on your credit card statements.

Important note: This article is for informational purposes only. The U.S. tax code is complex, and you should speak with a professional before making any tax-related decisions.

How Crossbeam saved $10K+ with Ramp Price Intelligence

“Right now, I text a group of colleagues and search online—but being able to know within a 5% variance that we are solid on pricing? That gives me peace of mind."
Matt Dougherty, Senior Director of Finance, Crossbeam

How Clearbit closed the books >60% faster with Ramp + NetSuite

“Before Ramp, our month-end close took approximately 10 days. Now it takes three to four days—it's unbelievable.”
Kay Coolican, Accounting Manager, Clearbit

How Ramp helped Webflow lay a foundation for sustained growth

“This product allows us to enable our employees to be full-time right away, Ramp allows us to onboard people quicker, it allows us to get them the tools they need, which in many cases they need to be able to spend in order to grow.”
Ivan Makarov

How Candid expanded internationally with Ramp

“Ramp found over $250,000 in savings right out of the gate. That is far more valuable than any points program.”
Nick Greenfield, CEO, Candid

How FirstBlood’s switch to Ramp sped up their monthly close

“If I code one transaction with a certain vendor, Ramp knows. It makes suggestions based on past transactions. It just works.”
Kyle Potter, CFO, FirstBlood

How Elementus overhauled its spend management with Ramp

“The fact that I can have an expense, match it with a receipt immediately, upload it, and then integrate it into QuickBooks is a godsend.”
Matt Austin, Vice President of Operations, Elementus

How Eight Sleep consolidated their finance stack and launched a new product with Ramp

“Identifying the invoice, finding it in Ramp Bill Pay, and flexing it from there, takes all of one minute…it’s only a few clicks and you’re done.”
Irish Rose, Controller, Eight Sleep