3696294
Buying a new car built in the US. At what MAGI point does the phaseout for MFJ start and go to zero?
You'll need to sign in or create an account to connect with an expert.
The "One Big Beautiful Bill Act" (OBBBA) introduces a new deduction for interest paid on a new car loan. Under the 2025 tax law, the Car Loan Interest Deduction allows taxpayers to deduct up to $10,000 in interest on new car loans, but it phases out based on Modified Adjusted Gross Income (MAGI). To qualify, the car must be new, built in the US, and for personal use.
The tax deduction phases out for taxpayers with modified adjusted gross income that exceeds $100,000 (or $200,000 for joint filers).
https://www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions has more info about this deduction.
@JBogs Thanks for the question!!
The "One Big Beautiful Bill Act" (OBBBA) introduces a new deduction for interest paid on a new car loan. Under the 2025 tax law, the Car Loan Interest Deduction allows taxpayers to deduct up to $10,000 in interest on new car loans, but it phases out based on Modified Adjusted Gross Income (MAGI). To qualify, the car must be new, built in the US, and for personal use.
The tax deduction phases out for taxpayers with modified adjusted gross income that exceeds $100,000 (or $200,000 for joint filers).
https://www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions has more info about this deduction.
@JBogs Thanks for the question!!
From IRS: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
It will fully phase out at $250,000 for joint returns.
Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!
**Please cheer or say thanks by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Regards,
TurboTax Expert
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
realestatedude
Returning Member
JBogs
Level 1
in [Event] Ask the Experts: Tax Law Changes - One Big Beautiful Bill
TEAMBERA
New Member
ericbeauchesne
New Member
in Education
catdelta
Level 2