Vehicle loan interest incorrect

Forum|Forum|2 months ago
April 13, 2026
2 replies
32 views

I completed our taxes (married filing jointly, under $100,000 AGI) and Turbo Tax told me we were getting $1,802 back. I entered the vehicle loan interest (yes it was made in US) and the total increased to $1,958. That's an increase of $156 but we paid $1302.45 in interest. What am I doing wrong? I ran the checker and it said everything was fine. TIA.

Not A Product Question

NCperson

Level 15

@doglover2026 hard to say without more information.

What was on Line 22 of form1040 before and after you entered the loan interest? That line can't go below zero.

ReneV4

Level 6

It doesn't sound like you did anything wrong, and TurboTax is calculating this correctly.

You may be confusing the difference between a tax deduction and a tax credit. The recent legislation created a new deduction for car loan interest in 2025. A deduction reduces your overal taxable income, rather than reducing your tax bill dollar-for-dollar, like what a tax credit would do.

Your married filing jointly status with an AGI under $100,000 means your top tax bracket is likely 12%. Click here to use TurboTax's Tax Bracket Calculator 2025.

When you input a $1,302.45 deduction, it lowers your taxable income by that amount. The actual tax savings by way of the increase to your refund, is that deducted amount, multiplied by your tax rate (i.e. $1,302x12%=156.29).

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