If you take out a business loan, is the interest expense that you paid on that loan deductible on your taxes? The short answer is “it depends.”
Tax deductibility of interest expense depends not on the type loan, but on how the loan is used. Debt financing that is used for business purposes – that is, to support your restaurant’s operations – is generally deductible as a business expense. Exactly how that deduction shows up depends on the restaurant’s structure and ownership.
In collaboration with Everfund, the Fork CPAs Founder Raffi Yousefian, CPA explains how the use of debt proceeds affects the tax deductibility of interest expense in a small business. Check out the full blog answering the question: Is Interest Expense on my Business Loan Tax Deductible?