No Business Interest Deduction for Personal Credit Cards

A small business owner who ran a specialty boutique was unable to obtain a line of credit for the business, so she used her personal credit cards as needed. Unfortunately, the Tax Court said she could not deduct the interest because she couldn’t show that any credit card interest and finance charges constituted the business’ own indebtedness rather than her personal indebtedness. Lesson: Businesses should have their own credit cards and owners should not use their personal ones for business transactions. #IdeaoftheDay