Hello — I believe there may be a calculation logic issue in TurboTax related to the new car loan interest deduction.
Based on TurboTax guidance, the MAGI phaseout reduces the maximum allowable deduction, not the interest paid. When a taxpayer is within the phaseout range and the actual interest paid is below the phased-down cap, the full interest paid should still be deductible.
Currently, TurboTax appears to return a $0 deduction in this scenario, while allowing a deduction equal to the phased-down maximum when a much larger interest amount is entered. This suggests the phaseout is being applied to the interest paid rather than to the maximum deduction.
I believe this may represent a calculation bug and would appreciate escalation to the technical team for review.
