 So you can see publication 535 for more information about deducting business interest expenses. Alright, so see publication 550 for more information about deducting investment interest expenses. You can't deduct personal interest. So the credit card, not typically included. You can't typically deduct a car loan or something like that. You can't typically deduct the car loan. What about student loans? Again, it's personal. You don't deduct it here, but maybe you could deduct it somewhere. It might be an above-the-line type of deduction. That's another kind of exception to the general rule. Why? Most likely because the schools have a big lobbying industry for the universities, which jacked up the cost of education. Was that actually beneficial in the long run to people? I don't know because I think the cost of education would be a whole lot cheaper if they didn't do that and it would be easier to know what's happening, but that's how it is. So, however, you can deduct the qualified home mortgage interest. So that's the big one that it used to be before, by the way, a long time ago. They had more interest that was deductible, like even like credit card interest and whatnot. And once something is deductible, you'll note that it's very hard to remove it. Like, I feel bad for people that have large student loans that feel like they're tied to, like a political party, for example, who are promising to relieve the loan because they basically, that's what they bet on, right? That's what they, their action was based on the tax code. The tax code incentivized their action. And now it's almost like you've accepted money from the state and now the state's got you locked in, like happens to some people when we're on like welfare or something like that. It's hard to get off sometimes because then you'll lose it, right? It's hard to, then they pull the rug out from under you. So that's the problem with the tax code. Once a deduction is in place, it's hard to take it out because people have already made long-term plans on it. And that's why the tax code seems to move along kind of like a zombie and you can't basically simplify it. And so that's also why we need to be very careful when we make more and further complications to the tax code, which people put long-term plans on such as investments in education, investments in homes, and all that kind of stuff because you can't, you can't just change it if it doesn't work out. It's not something you can tinker with, but I get. So then we have the, however, you can deduct qualified home mortgage interest on your Schedule A and interest on certain student loans. That's on Schedule 1. We talked about it before in Schedule 1. Remember that Schedule 1 is not an itemized deduction. You might get a benefit of being able to deduct things on Schedule 1, such as the student loan interest, even if you're not itemizing. So form 1040 line 21, you can see more information on that in publication 936 and publication 970. So if you use proceeds of a loan for more than one purpose, for example, personal and business, you must allocate the interest on the loan to each use. Now again, because we are now deducting personal things on the Schedule A, this type of thing will happen more often in that we might be able to qualify for the same cost, the same expense in different areas. For example, if we used part of our home not simply for personal use, but for the business, we have a home office in it. If we have a home office in it, then the mortgage that we paid for the home, which we're using in part for our business, you would think would be deductible because that would be similar to me basically getting a separate building that was my business and I own it and I'm paying interest on the loan that I got for my office building or something like that. You would think that would be deductible because it would be business related. However, if it's with regards to your home, that means only part of your home is going to be deductible on the Schedule C, which is typically more beneficial than deducting on the Schedule A because you don't have any limitation, you don't have that cap of clearing the standard deduction to be able to deduct on the Schedule C. So what are you going to do? Because you get only one interest 1098 form, you're going to have to use some kind of percentage allocation allocating between Schedule C and Schedule A. What you can't do is report the amount on Schedule C and then double dip, recording the same amount on Schedule A. In other words, if you had $10,000 of mortgage interest on the home and you can only deduct $10,000, where is it going to be? Some ratio of it will have to go to Schedule A, like $2,000 of it or whatever, and the rest go to the Schedule C, $2,000, and then $8,000 on Schedule A or something like that, and you might use some allocation method such as the square footage of the home versus the office square footage, which we'll talk about when we get to a Schedule C type of business. So you allocate interest on a loan in the same way as the loan is allocated. You do this by tracing disbursements of the debt proceeds to specific uses for more information on allocating interest. You can see publication 535. So you allocate interest on the loan the same way as the loan is allocated. In other words, we're determining that the home mortgage loan is something that is deductible whereas a loan for other purposes is not. So then the question is, well, what if I took a $10,000 loan out? How do I know what it was used for? Because I could have just got a loan and put collateral on it, and then I went on vacation. I got $10,000 loan. I went on vacation. How do I know where it should be allocated for? Or I might have put the home as collateral on the loan. So now the home is collateral for the loan, but I used the money to buy a car or something like that rather than basically increase the value of the home or something like that. Well, so that can get kind of confusing because on the bank side of things, the bank isn't really concerned about whether it's deductible or not. The bank is concerned with whether you're going to be able to pay back the loan. So what they're looking for is collateral on the loan in the event that you default on the loan. But what we need for taxes is to know what the proper allocation of the loan was for so we can determine that the rent on the purchasing power of the money, if it's deductible or not, and if deductible where? On Schedule C, on Schedule A, possibly not deductible at all. And so that's the question. In general, if you paid interest in 2023 that applies to any period after 2023, you can deduct only amounts that apply to for 2023.