Use one option and make sure you only report your credit card interest paid once.
Line 39 Part III Cost of Good Sold: Report on Line 39 if you used the credit cards to purchase product to sell or to manufacture your finished goods. The credit interest would be tied to your inventory.
Part II Expenses Line 16b: Other Interest: This line is for mortgage interest not reported on 1098. If you used your credit cards to make purchases that are fully deductible in the tax year, you could report it there as well.
You could also deduct the interest paid on your credit card used to purchased goods sold on Line 16b. But only deduct the portion associated to the goods sold during the year. In this case, you don’t need to report the interest expense on Line 39 Part III of Schedule C.
Part V Other Expenses Line 48: If you made business purchases that belong to multiple categories, you could deduct your credit card interest on Line 48.
If you use cash accounting method, only claim interest you actually paid during your tax year.
Disclaimer:
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