Home Forums Money matters Paying business loan – before or after tax

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  • #993060
    audent
    Member
    • Total posts: 3

    Hey there :),

    Ive searched for this information and haven’t been able to find it and I know its a fairly basic question.With business loans, is that considered a business expense and therefore paid before tax or is an after tax expense?

    Thanks heaps.

    #1189575
    Dave – FS Concierge
    Moderator
    • Total posts: 2,541

    Hi [USER=72210]@audent[/USER],

    Welcome to the forums!

    Hopefully one of our tax experts can help you out with this one, so sit tight. :)

    Dave

    #1189576
    audent
    Member
    • Total posts: 3

    Thanks :)

    #1189577
    MyGreatIdea
    Member
    • Total posts: 2,278

    A business loan is a balance sheet item, and the repayment of it doesn’t enter your profit & loss (ie it’s not an expense, the payment reduces your liabilities, just as receiving the original funds isn’t income, but increases your liabilities).

    However, the interest portion may be deductible and included as a business expense. This you would have to speak to your accountant to confirm, depending on your personal situation, but as a legitimate business expense it would be pre-tax calculations.

    Wendy :)

    #1189578
    audent
    Member
    • Total posts: 3

    Thank you :)

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