interest claimed on new auto loan

RSRAGENCY · ‎February 24, 2026

If vehicle is used for 50% business use, how is the interest deduction shown

DianeW777

The personal use and business use must be separated and the following will explain how. The vehicle use will be determined by the mileage (business miles divided by total miles). Use this percentage to determine the business uses portion of the interest.

For the business use percentage of the interest you would use it on your Schedule C as other interest whether you use standard mileage rate (SMR) or actual expenses for your vehicle.

Self-employed individuals can deduct business vehicle expenses using the 2025 rate of $0.70 per mile (or $0.725 in 2026) for operating costs. Separately, you can deduct business-related parking fees and tolls. Loan interest is deductible based on the percentage of business use.

The personal use portion of interest may qualify for the new vehicle loan deduction. Click the link below for qualifications and enter the deduction.

What is the vehicle loan interest deduction?

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View solution in original post

DianeW777

The personal use and business use must be separated and the following will explain how. The vehicle use will be determined by the mileage (business miles divided by total miles). Use this percentage to determine the business uses portion of the interest.

For the business use percentage of the interest you would use it on your Schedule C as other interest whether you use standard mileage rate (SMR) or actual expenses for your vehicle.

Self-employed individuals can deduct business vehicle expenses using the 2025 rate of $0.70 per mile (or $0.725 in 2026) for operating costs. Separately, you can deduct business-related parking fees and tolls. Loan interest is deductible based on the percentage of business use.

The personal use portion of interest may qualify for the new vehicle loan deduction. Click the link below for qualifications and enter the deduction.