Can I deduct auto loan interest in 2026?
Yes, for the first time since the 1980s. The One Big Beautiful Bill Act created a federal deduction of up to $10,000 per year on interest paid on qualifying personal-use vehicle loans for tax years 2025 through 2028. The vehicle must be new (you must be the original user), have a gross weight rating under 14,000 pounds, undergo final assembly in the United States, and be financed by a loan originated after December 31, 2024. The deduction phases out for modified adjusted gross income above $100,000 (single) or $200,000 (married filing jointly).