Make interest payments work for you, not against you
You can deduct business-related interest on your business return if you used the borrowed funds to purchase business supplies, equipment, services, etc. Co-mingling business and personal expenses makes it difficult to determine what amount of the interest is business versus personal. If this happens, the IRS may consider the entire amount as nondeductible personal interest and disallow the deduction. Therefore, keep all business purchases made with loans and credit cards clearly separate from your personal expenses. Use a separate credit card for your business to make it easier.
Also, make sure to tell your tax professional if you use home equity debt for business expenses. He or she will be able to determine how much of the interest you can elect to deduct directly against self-employment income.