How do I deduct the passenger vehicle loan interest from the One Big Beautiful Bill act

[MinhT1 · Accepted solution]

The OBBBA has introduced a new deduction for car loan interest paid for new cars you bought for personal use between 2025 and 2028.

The deduction is up to $10,000 if your income is under $100,000 (or $200,000 if MFJ). The deduction is gradually phased for higher incomes.

For more information, please read this TurboTax Help article.

In TurboTax Online, you can enter your car loan deduction by following these steps:

1. Open your tax return
2. Click on Federal in the left-hand column, then on Deductions & Credits
3. Navigate to the list of Deductions and Credits
4. Click on Other Deductible expenses
5. Locate the section Cars and Other Things You Own and click on the arrow on the right
6. Click Start next to Car Loan Interest 
7. Follow the TurboTax questionnaire to enter your car loan interest
8. The deduction will transfer to Schedule 1-A of your form 1040.