One of the lesser-known provisions of the One, Big, Beautiful Bill Act is a new deduction for certain vehicle interest. This provision allows taxpayers to deduct up to $10,000 in interest on loans to buy new cars, minivans, vans, SUVs, pickup trucks and motorcycles. Vehicles must be purchased for personal (not business) use and final assembly must occur in the United States. This deduction for qualified loans made after 2024 and before 2029 is available to both itemizing and nonitemizing taxpayers. However, limitations apply. Used and leased vehicles don’t qualify, and the deduction phases out for modified adjusted gross income above $100,000 (individuals) and $200,000 (joint filers).
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