Car loan interest deduction calculator
A new deduction for interest on a loan for a new, American-assembled vehicle. Run the checklist first; the calculation only counts if every box is true.
Tick the checklist and enter your interest to see the deduction.
Estimate only, not tax advice. Your return is decided by the IRS forms and instructions, and a tax professional can check your numbers.
The VIN check is a manual step
Final assembly in the United States is a requirement, and this page cannot verify it. Check the window sticker (or label on the door jamb), or enter the VIN into the National Highway Traffic Safety Administration’s VIN decoder at nhtsa.gov, and look at where the vehicle was assembled. The IRS guidance lets you rely on the plant shown in the VIN or the final assembly point on the label. Keep a copy with your tax records.
What the calculator does
It takes the interest you paid in the tax year (your lender reports it, usually on Form 1098), stops at $10,000, and subtracts $200 for each $1,000 or part of $1,000 your MAGI is over $100,000 ($200,000 joint). Interest you deduct on a business schedule is not counted again. The result goes on Schedule 1-A, Part IV.
Sources
- Schedule 1-A (Form 1040), 2025
- IRS: Guidance on the deduction for car loan interest
- IRS: Tax deductions for working Americans and seniors
Last checked . Figures follow the IRS pages above; the law can change, so confirm on irs.gov before you file. This site gives estimates, not tax advice.
Questions
How much car loan interest can I deduct?
Up to $10,000 per year for tax years 2025 through 2028, for interest on a qualifying loan.
Which cars qualify?
New vehicles (original use starts with you) with final assembly in the United States, under 14,000 pounds: cars, minivans, vans, SUVs, pickups and motorcycles, bought for personal use. Used vehicles and leases do not qualify.
How do I check where the car was assembled?
Look at the label on the car or use the VIN. The IRS guidance points to the NHTSA VIN decoder. This calculator cannot check it for you; that step is manual.
Does the loan date matter?
Yes. The loan must have started after December 31, 2024, and be secured by the vehicle. The vehicle’s VIN goes on your return for each year you claim the deduction.
How does the income phase-out work?
The deduction drops by $200 for each $1,000, or part of $1,000, of MAGI above $100,000 ($200,000 joint). This rounds up, which differs from the overtime and tips rule.
Do I need to itemize?
No. It is available with the standard deduction too.