interest deduction

interest deduction definition - business

interest deduction

The reduction in taxable income from the payment of interest on borrowed funds that may be declared on tax returns. Individuals are permitted to deduct mortgage interest and interest on funds used for investment purposes, but only when deductions are itemized. Interest on consumer loans is not permitted as a deduction. Businesses are permitted to deduct nearly all interest expenses.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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