There are many people who do not know how loans work in accounting. There are even those who have not yet found an answer to the question "are loans deductible?" . Therefore, this article is going to try to answer this question.
We pay as deductible expenses
If someone has financial products and the income statement campaign is approaching, it is interesting to know what expenses will be able to be deducted to pay the minimum possible income tax.
Usually it is not possible to deduct the expenses of a loan, since it is a financial product that does not increase the capital nor is it an income for the rent. Therefore, there is no obligation to declare it. However, there are some exceptions where both interest and commission fees may be deducted. In the event that this money is used for a purpose included in the legislative framework such as the following:
- A loan dedicated to improving real estate , such as repairs to the habitual residence.
- A loan contracted for the acquisition of a habitual residence in the form of a mortgage. (Although it is not deductible if it has been acquired after January 1, 2013).
In general terms, mortgage loans or any loan destined to carry out reforms may be deducted in the income statement. The maximum amount to be deducted is 9040 euros and it will be necessary to fill in boxes 502 and 501 with the amounts to be deducted.
Therefore, as can be seen, it will only be possible to deduct a loan associated with a habitual residence. Always taking into account the above circumstances and knowing that for a second residence it is not possible to deduct any type of amount.
Avoid surprises with deductible loans
If you do not want to have surprises, it is necessary to take into account that the interests of personal loans are not deductible in the income statement. However, it is advisable to review the current legislation at the time it is needed. Since it is updated relatively frequently. In case of doubt, it is best to go to a legal advisor or an office of the Tax Agency.
If at the time of making the declaration you pay, you can always choose several options:
- Split the payment into several installments.
- Request a loan to be able to face the payment without the accounts of that month being out of order.
So are loans deductible? To answer this question, it must be taken into account that personal loans are not going to be deducted. In case of applying for a mortgage loan, you have to meet a series of requirements ; including that the home is the usual one and not a second or third residence. Are you looking for financing? In I deales Loans you can compare the best online financing offers.