Inside Money Today

Lendinero's blog on Growing Your Business

Tax Extensions and Loan Interest Deductions

Tax Extensions and Loan Interest Deductions

Most small businesses have a habit of filing corporate taxes late.  If you have not filed your corporate taxes, hopefully you filed a tax extension.  The loan interest deduction is a great benefit to most businesses.  On daily payment loans you can fully deduct the interest you pay because the payments are daily.  On business lines of credit you can only deduct what you utilized and the interest you paid. The tax deduction factor is an extra savings strategy for your business.  Many businesses when they take a business loan only take into account the cost of capital and not the interest deduction factor.  A good financial planner or tax advisor can calculate the real cost of interest on a business loan.  When you obtain a business loan you may pay an annual rate of 10%.  However, if you saved 1% to 4% annually because you paid interest you need to reduce that percentage from the overall percentage.  The loan interest deduction when you reduce it from the overall annual rate will tell you the real cost of capital. If you want to learn more on how to obtain a lower interest rate taking into account the loan interest deduction write to us on [email protected]

© 2015 Lendinero

Show Buttons
Hide Buttons