You cannot deduct a personal car loan or it's interest. While typically, deducting car loan interest is not allowed there is one exception to this rule. If you use your car for business purposes you may be allowed to partially deduct car loan interest as a business expense.
Note:
If you use your car for business purposes, you may be able to deduct actual vehicle expenses. But you will need to keep accurate records of your business expenses to show proper use of the vehicle. Actual vehicle expenses that may be deducted, when used for business, may include but is not limited to:
Automobile loan interest
Vehicle maintenance
Insurance
Tolls and parking fees
Gasoline
Oil Change
To determine the amount of each actual vehicle expense that may qualify for a tax deduction you will need to calculate the percent of time that the vehicle is used for business. Typically, this calculation is determined by the number of miles driven for business purposes only.
You will have to determine if it is more beneficial to you to use the standard mileage rate deduction or actual vehicle expense deduction. You cannot use both methods.
If this is a business you will enter the vehicle expenses on Schedule C for your business. You can type "Schedule C" in the search bar and then choose what you work on and go to Business expenses.
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Business Use of Vehicles - TurboTax Tax Tips & Videos
