What is the interest expense tax deduction?
Interest is a cost that you pay to borrow money. Depending on your purpose for borrowing the money, the Internal Revenue Service (IRS) may allow you to claim a tax deduction for your interest expenses.Interest TypesAs of 2010, the IRS permits you to claim a tax deduction for interest you pay on investment loans, qualified residence loans (mortgages) and student loans. Interest on personal loans, such as a car loan, cannot be deducted.Deduction TypesMortgage interest and investment interest are both itemized deductions, while the student loan interest deduction is an adjustment to income as of 2010.ReportingItemized deductions are reported on Schedule A. On the 2010 tax return, the student loan interest deduction is reported on line 18 if you file your tax return using form 1040A or line 33 if you use form 1040. You cannot claim any of the interest deductions if you file your taxes using form 1040 EZ.Time FrameInterest can only be deducted in the year that it applies as of 2010. For exa
