You may have recently heard about a new federal tax provision related to car loans, and for some Members, this could be helpful.

Under new guidance from the U.S. Department of the Treasury and the IRS, a new deduction may be available for interest paid on certain vehicle loans.

Here’s the simple version:

  • The deduction applies to new vehicle loans taken out after December 31, 2024
  • The vehicle must be new, with final assembly in the United States, and purchased for personal use
  • Eligible taxpayers may be able to deduct up to $10,000 per year in auto loan interest
  • This deduction may apply whether you take the standard deduction or itemize

There are specific rules around which vehicles and loans qualify, and eligibility can vary by situation. If you’re planning to purchase a new vehicle or recently took out a loan, a tax professional can help determine whether this benefit may apply to you.

We’re sharing this as general information so you’re aware of potential changes—but as always, individual tax guidance is best handled by a trusted tax advisor.

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