1. Filing status & income
MAGI here is modified adjusted gross income — for most filers with no foreign income or certain exclusions, this is close to the AGI on last year's return, adjusted for this year's income. Married filing separately uses the same $100,000 threshold as a single filer, applied to each spouse's own return.
2. Loan interest
This is the interest portion of your loan payments this year — not your monthly payment and not the vehicle's price. Your lender's year-end statement (Form 1098, where applicable) or loan amortization schedule shows this figure.
3. Eligibility checklist
All eight must be true. If even one is not, none of the interest above qualifies for this deduction — the deduction is not prorated for a partially-eligible vehicle or loan. The cap itself does not double for a joint return even when every item below is met — see the results below and the FAQ.
Fill in filing status, MAGI, and interest paid, confirm the checklist, then click Calculate.
Estimate
What this does not cover
- Not a full tax return. This estimates one deduction only — not your total tax liability, other deductions or credits, or state tax.
- Eligibility is self-reported — final assembly location, lien status, and vehicle classification are confirmed by you, not verified here. Check the vehicle's window sticker or decode its VIN with NHTSA's VIN decoder before relying on the final-assembly checkbox.
- Payroll and state tax are unaffected — see the footer disclaimer.
- Refinanced loans and loans that pay off an earlier vehicle loan have their own rules this calculator does not model — check current IRS guidance if your loan was refinanced.
2025 federal marginal tax brackets (reference)
For choosing the rate above. Sourced from the IRS's published 2025 brackets; verify current-year brackets before filing, and remember your marginal rate is the rate on your last dollar of income, not your average rate.
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 |
| 37% | over $626,350 | over $751,600 |
Common questions
How much car loan interest can I deduct?
Up to $10,000 per year of qualified interest paid on a loan for a new, personal-use passenger vehicle finally assembled in the United States, for tax years 2025 through 2028. This is a deduction on the INTEREST you pay, not the price of the vehicle or the loan amount, and it phases out for higher earners -- see the phase-out question below.
Does the $10,000 cap double for married filing jointly?
No. Unlike some other new deductions, a married couple filing jointly shares ONE $10,000 cap between them, not $10,000 each. Married filing separately works differently -- see the next question.
Can I claim this if I file married filing separately?
Yes -- and this is the detail most people assume is wrong, because this portfolio's own separate 'no tax on tips and overtime' deduction calculator excludes MFS entirely. This auto loan interest deduction does NOT exclude MFS: each spouse gets their own $10,000 cap on their own separate return, phased out using the same $100,000-$150,000 MAGI thresholds a single filer uses.
What is the income phase-out?
The deduction is reduced by $200 for every $1,000 (or part of $1,000) that your modified adjusted gross income (MAGI) exceeds $100,000 (single, head of household, or married filing separately) or $200,000 (married filing jointly). It reaches exactly $0 at $150,000 MAGI (single/HoH/MFS) or $250,000 MAGI (joint).
What vehicles qualify?
A NEW car, minivan, van, SUV, pickup truck, or motorcycle with a gross vehicle weight rating under 14,000 lbs, with final assembly in the United States, bought (not leased) for personal use with a loan secured by a first lien on the vehicle. RVs and campers do not qualify even when used as a primary residence. A salvage-titled vehicle, a vehicle bought for scrap or parts, a fleet purchase, and a vehicle used in a trade or business are all excluded.
Is this tax advice?
No. This calculator applies the published statutory cap, phase-out formula, and eligibility rules to the numbers and checkboxes you enter. It is not a full tax return, it does not verify your vehicle's final assembly location or your loan's terms, and it is not a substitute for reviewing the IRS's own guidance or consulting a qualified tax professional before you file.