2025 car interest

[srajkowski]

MAGI was over 200,000, but less than 250,000.  The allowable deduction should have been around $6200.  Only had about $1500 in interest, but Turbo Tax said it was $0.  Refund change should have been around $360.

[AmeliesUncle]

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@srajkowski wrote:

MAGI was over 200,000, but less than 250,000.  The allowable deduction should have been around $6200.  Only had about $1500 in interest,

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The phase-out doesn't reduce the maximum amount, it reduces the allowable amount.

You said $6200, so I think you mean the phase-out is reducing things by $3800.  You only had $1500 of interest, so subtracting $3800 from that result in a $0 deduction.

[AmyC]

I created a return to emulate your issue. Income in the phaseout range. No deduction. I went to the IRS website and looked at the calculation for the car loan interest on Sch 1-A. The numbers flow through lines 22-29. The last line shows to subtract the disqualified amount from the amount paid. In my case, and I bet in yours, the disqualified amount is larger than the amount paid so there is no deduction allowed. Next year, you will have paid more interest and be above the disqualified amount.

Give me a minute to upload the worksheet. You can compare it to your Sch 1-A to see the flow.