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Posted on 01/02/2026 7:02:50 AM PST by Oldeconomybuyer
One Big Beautiful Bill Act – car loan interest tax deduction is a groundbreaking new tax benefit that allows taxpayers to deduct up to $10,000 per year in interest on loans for new U.S. assembled vehicles from 2025–2028. This provision, part of the One Big Beautiful Bill Act of 2025, aims to support American manufacturing and provide significant tax savings for vehicle owners.
Below, you’ll find a comprehensive list of qualifying vehicles and all the key requirements you need to know to claim this deduction.
To qualify for the One Big Beautiful Bill Act car loan interest tax deduction, your vehicle and loan must meet all of the following criteria:
(Excerpt) Read more at freedomtaxaccounting.com ...
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Tagged, cause I wanna see how freepers feel about this idiotic bill. People are going to deliberately buy more car than they can afford just for the tax break.
I would prefer CAR REPAIR TAX DEDUCTION every car I’ve had past a 1985 has cost more.
Dealership garages wink.
will not this benefit cause corresponding car price increases?
the more people who are able to purchase anything at a particular price means more demand which means higher prices. Think college tuition.
high prices and debt slavery
Many people now take the standard deductions.
No benefit there
What should have been codified is a gradually increasing tariff schedule on all imported car parts (especially engines) until not only almost all assembly but manufacturing and engineering of parts was moved back into the US.
It’ll cause those who “have to keep up with the jones’s” to go deeper in debt. I’m praying for a good year for my business cause every one of my cars have over 100k on them and I am a little apprehensive about driving to vacation destinations with them.
My wife and I have, for years, lived within our means and saved. If we want to buy a new car, we can pay cash for it. We are lucky in that respect, but we have lived by that creed of saving and living within our means. Not everyone does.
But I don’t see why people think this is a bad thing. Every little bit counts, in my opinion.
Some people will take advantage of it. Some won’t. Some will buy American because of it. Some won’t.
George Washington once famously said: “Many Mickles make a Muckle.”
Dang, no hellcat for me. 🤣🤣🤣🤣
the new federal automobile loan interest deduction introduced for tax years 2025–2028 under the One Big Beautiful Bill Act is NOT limited to taxpayers who itemize deductions.
This deduction—up to $10,000 annually on qualifying interest for loans on new, U.S.-assembled personal-use vehicles purchased after December 31, 2024—is an above-the-line deduction (adjustment to income).
You can claim it even if you take the standard deduction.Official IRS guidance confirms this explicitly: the benefit applies to both those who take the standard deduction and those who itemize.
It’s reported on a new form (such as Schedule 1-A) as an adjustment, similar to student loan interest.Note that personal car loan interest was generally not deductible before this law (unlike mortgage or business-related interest), and this temporary provision has specific eligibility rules, including income phase-outs and vehicle requirements.
Well, It does give freedom for you to choose any new American car, market based.
It is not clear if the deduction is under the cover of itemized deductions. Standard deduction may still be greater than itemized.
Like many targeted tax laws it is more perception than actual.
I remember the Iowa Cattlemen’s association lobbying for a tax credit for each breeding cow owned at end of year. Didn’t really change anything. But it did justify the association dues and let them raise the dues. I got to charge more for that extra tax form.
Bottom line is that auto manufactures probably perceive this as a good thing.
It is not going to change things that much and is better than tax credits for EV’s.
“But I don’t see why people think this is a bad thing.”
it’s not ... it’s a good thing ... most ppl who need a new auto cannot afford to pay cash ... and this deduction is aimed at the USA auto industry specifically ... [btw, this deduction can be taken even if a filer does not itemize.]
FR is infested with closet anti-Trumpers and naysayers who know they’ll be zotted if they overtly attack President Trump, so they make ridiculous attacks against minutia ...
Actually this will be under Schedule 1A, and won’t affect the standard deduction.
This is aimed at younger people. Most people at FR probably have a decent car or two.
Try starting over at age 20 in today’s environment. No credit, no bank account, no affordable home ... we would figure it out but government educated kids have little hope. I suspect that this was allowed by Congress to build US car manufacturing up a bit, or at least to buy their votes.
Like everything else it is better to not have debt, and I expect that these changes to tax law will not put Dave Ramsey out of business.
it’s VERY clean non-itemizers can take the auto interest loan deduction. one just has to bother to look it up:
“the new federal automobile loan interest deduction introduced for tax years 2025–2028 under the One Big Beautiful Bill Act is NOT limited to taxpayers who itemize deductions.
This deduction—up to $10,000 annually on qualifying interest for loans on new, U.S.-assembled personal-use vehicles purchased after December 31, 2024—is an above-the-line deduction (adjustment to income).
You can claim it even if you take the standard deduction.Official IRS guidance confirms this explicitly: the benefit applies to both those who take the standard deduction and those who itemize.
It’s reported on a new form (such as Schedule 1-A) as an adjustment, similar to student loan interest.Note that personal car loan interest was generally not deductible before this law (unlike mortgage or business-related interest), and this temporary provision has specific eligibility rules, including income phase-outs and vehicle requirements.”
[and looking up ANYTHING now is easy as pie because all one has to do is ask GROK. I almost never bother to actually search for anything any more.]
More awful policy.
this stinks... all my stuff is paid for. i’d ask for mortgage interest deduction back, but hell, i paid for the house already too.
My car loan is 0%. I guess I don’t get a deduction.
actually applies to USA-assembled cars: VINs starting with 1, 4, or 5 ...
I'm not a subscriber to the "you have to spend money to make money" philosophy.
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