The interest you pay on loans and credit could be tax deductible. Kim Parlee explains when interest payments may be deductible and could save you taxes.
00:00:03.740 No one likes to see that interest charge on your credit cards and loans.
00:00:07.030 But you might be able to make that interest work for you at tax time since some of it
00:00:11.100 may be deductible on your tax return.
00:00:13.500 And whether interest is deductible depends on how you use the money you borrow.
00:00:17.894 If the money you borrow-- let's say it's either a loan or on a credit card--
00:00:21.060 is for business or investment purposes, then that interest expense may be deductible.
00:00:25.990 But if you are borrowing money for personal use--
00:00:28.560 say your own clothes or food-- that interest would not be deductible.
00:00:32.281 And if you're not sure what is personal and what
00:00:34.280 is business, quick way to think about it-- are you borrowing money to make money?
00:00:38.840 If you are, then it makes it more likely the interest will be deductible.
00:00:42.450 But remember, keep track of where and how you spend money.
00:00:45.580 And have your records on hand for the CRA.
00:00:48.204 I'm Kim Parlee, and thats' your "Money Talk Minute."