Define: Interest Deduction

UK Accounting Glossary

Definition: Interest Deduction



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Full Definition of Interest Deduction


An interest deduction is any deduction of interest payments that one can take on one’s IRS 1040 form as a way to lower one’s taxable income for the year. Not any interest payment qualifies as an interest deduction. Some examples of the qualifying interest deduction are interest paid on home mortgages, student loans, and various business expenses. Strict rules apply to anyone interested in taking an interest deduction. For example, student loan payments require that the person has taken the loan to pay for his or her own expenses, or the expenses of a spouse or dependent. An interest deduction for a home mortgage is recorded on Schedule A as a part of one’s itemized deductions. A business interest deduction is taken on Schedule C, and an interest deduction for a student loan is recorded directly on Form 1040.


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Definition Sources


Definitions for Interest Deduction are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.