The IRS has updated its guidance on the business interest expense deduction to reflect changes and clarifications made by the One Big Beautiful Bill Act (OBBBA). The revised FAQs address the section 163(j) rules following changes made by the 2017 Tax Cuts and Jobs Act and OBBBA and remove outdated CARES Act guidance.
Here’s what you need to know.
What is the business interest expense deduction?
Unlike most personal interest, business interest may be deductible. However, section 163(j) generally limits a taxpayer’s deduction for business interest expense to the total of business interest income, 30% of adjusted taxable income (ATI), and floor…
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