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To enter New Car Loan Interest -
Click on Federal Taxes (Personal using Home & Business)
Click on Deductions and Credits
Click on I'll choose what I work on (if shown)
Scroll down to Cars and Other Things You Own
On Car Loan Interest, click on the start or update button
Vehicle interest for new car loans is entered in the Deductions and Credits Section of TurboTax. Follow the steps below:
Your car loan interest deduction will transfer to Schedule 1-A of your form 1040, which is then transferred together with other deductions to line 13b of your form 1040.
You may be able to deduct up to $10,000 of interest paid for the purchase of a new vehicle in 2025. You must meet the following rules to take the deduction:
Please review the TurboTax Help articles for more information: What is the vehicle loan interest deduction? and One Big Beautiful Bill: New Car Loan Interest Deduction (Part 4),
If you qualify for this deduction, it applies to taxpayers who take the standard deduction and those who itemize. Refer to the IRS website IRS provide guidance on the new deduction for car loan interest under the One, Big, Beautiful Bill for more information.
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