Include loan in tax return?
When you borrow or lend money, you may be able to deduct related costs or losses for tax purposes. You must also state the interest on a privately granted loan in your tax return.
The legislator has made a decision regarding the tax recognition of loans. It does make a difference whether you are financing a home or a rental house.
Tax return - only certain financing costs are deductible
- If it is a private matter from a tax point of view, you are left with the loan costs. The financing of a rented house in turn serves to generate income. Any costs you can then state in the tax return.
- If, as an investor, you collect interest on private loans, you have to involve the tax authorities. You declare any interest you have collected privately in Annex KAP.
- If the tax authorities find that close relatives are borrowing money, the tax is determined on privately generated interest income not according to the settlement rate, but according to the individual Tax rate. In such a case, you can continue to claim income-related expenses.
Employees - specify loss on loan
- It happens that employees give their employer a loan. It happens every now and then that the repayment fails. Can I claim the loss for tax purposes?
- Under certain conditions, the economic loss can be claimed as income-related expenses. The granting of a loan must have the aim of securing the job or of attaining a higher position. That should be demonstrable.
- This will be recognized as income-related expenses from normal income Tax office then refuse if the employee lends money to earn high interest.
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Pay taxes with credit - no recognition of costs
- If you have to take out a loan because you have to pay back taxes, you cannot declare the costs in your tax return for credit. The tax office refuses to recognize them as income-related expenses. With a high tax back payment, you are in poor hands. If necessary, you can agree to pay in installments.
- Because Income tax is not taken into account in advertising costs or business expenses. According to the tax office and the tax courts, it belongs to the debtor's private sphere. A tax assertion is therefore omitted without exception.
Finance your car with a loan, are interest charges Deductible only if you use the vehicle to generate income. As a self-employed person in the field, you have to delimit private use. If it is used exclusively for business purposes, there are no restrictions on tax claims.
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