Some Drivers Will Qualify for a New Tax Break on Car Payments

"An update to the tax code will enable some car buyers to write off their monthly payments on their taxes this year, with significant caveats for eligibility."

"This tax break will apply to new vehicles bought after December 31, 2024, but only those that were assembled in the United States."

"Up to $10,000 in annual interest is deductible, though the specific amount will depend on your tax bracket, and this deduction is available regardless of itemization."

Drivers of internal combustion engine vehicles are facing rising gasoline prices, prompting some to consider electric vehicles. A new tax code update allows certain car buyers to deduct monthly payments on new vehicles assembled in the U.S. starting in 2025. However, used car buyers and single tax earners with a modified adjusted gross income of $100,000 or more do not qualify. The deduction applies to up to $10,000 in annual interest and remains effective through 2028, regardless of whether taxes are itemized.

Read at InsideHook