How to calculate business use interest on a personal credit card. Example: If 65% of my purchase are Business related can I claim 65% of the interest.

[SandraWWoodbridge]

Yes, you can deduct personal credit card interest expense in the proportion of business-related purchases. If you are Self-employed, you would enter the interest expense in the T2125 Form (Line 8710 – Interest and bank charges).

As per CRA, interest deductibility depends on the use of the money borrowed:

Where money is borrowed, the use of the money must be established and the purpose of that use must be to earn income. Borrowed money used to acquire a life insurance policy or property the income from which would be exempt will not qualify. The term use refers to the current use of the borrowed money and in certain situations may include indirect use. Where an amount is payable for property acquired, the property must have been acquired for the purpose of earning income (other than exempt income or to acquire an interest in certain life insurance policies).

Please also visit TurboTax article: Is Interest Deductible?

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