Some of your expenses can be deducted from your gross income to reduce the amount of taxes you’ll owe. In this situation, you’ll pay interest on your personal loan and you may be wondering if the interest you pay is tax deductible, similar to the home mortgage interest deduction.
According to experts, interest paid on a personal loan is generally not tax deductible. However, it may depend on the purpose of the loan. If you’re using it to cover business or education expenses (like paying tuition), then the interest may be tax deductible. But if you’re using the loan to cover a wedding or a home renovation, the interest charges are generally not tax deductible.
But before writing anything off, consult with your accountant to see what may and may not be tax deductible.