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The answers to these “quick and not so quick questions are never quick or easy.  Our answers are always based upon the situation, tailored to each client, their circumstances, and their goals AND of course the tax law!🙃

Over the past few weeks, our office has spent 20+++ hours attending seminars focused entirely on the newly passed One Big Beautiful Bill Act (OBBBA), Public Law 119-21.  We’ve been  learning the law and discussing how to educate our clients (and ourselves).  Working up tax planning and tax minimization ideas for 2024 (where applicable), 2025, and 2026,+++, and we’ll continue to do so as technical corrections and guidance are released.

Each week, I’ll highlight a different portion of the new law to start thinking 💭. This isn’t about quick answers or solutions which are like “putting a band-aid on a bullet hole” 🩹💥. These “quick questions” are just jumping-off points for deeper conversations, just as these blog posts are designed to get you thinking… but the real answers will depend on your short- and long-term financial goals.

🚘 “A Tax Deduction for Car Loan Interest”? Yes… But We Must Follow the Rules.

🧠… for those of you are shopping for a new car and might have heard something about being able to deduct the interest on the car loan associated with the purchase here’s what you need to know:

📝 The Highlights:

🗓 Effective: 2025–2028 

💰 Up to $10,000 per year of car loan interest can be deducted

👨‍👩‍👧‍👦 Phases out for Modified Adjusted Gross Income over:

• $100,000 (Single)
• $200,000 (Married Filing Jointly)
• 🚫 Leases do not qualify.

Qualified Interest must be:

• On a loan originated after December 31, 2024
• Used to purchase a new vehicle (not used)
• The Original use must start with the taxpayer claiming the deduction
• It is for personal use only cars (not for business)
• The loan must be secured by a lien on the vehicle
• If you refinance the loan, interest may still qualify — yay! 🎉 :

🚙 What Counts as a “Qualified Vehicle”?

• Car, SUV, minivan, van, pickup, or even a motorcycle 🏍
• GVWR (Gross Vehicle Weight Rating) under 14,000 lbs
• Final assembly must be in the U.S. 🇺🇸

🧾 Reporting & Eligibility:

• Itemizers and non-itemizers can take the deduction.
• VIN must be included on your tax return 📋
• Lenders will be required to furnish statements to taxpayers showing the total amount of interest received during the taxable year (like mortgage lenders do now).
• Lenders or other recipients of qualified interest must file information returns with the IRS
• IRS promises some transition relief for lenders in tax year 2025 🙏

🔗 IRS Resource for More Info: OBBBA Tax Deductions Overview

💡 Final Thoughts:  Let the planning begin

Please keep the “quick and not so quick questions” coming and let’s keep the discussions going until we can be sure we have the best answer or solution — not just for your taxes, but for your goals 🧠💬. Buying a car isn’t just about color and cupholders anymore — it’s a tax planning opportunity (yes, really).

Seems like this is another call to action, no wishful thinking, let’s not say “I wish I had…”,  and as always

Feel free to search our website for some of our complementary resources or get in touch:  Contact us if you have tax concerns, tax minimization questions or want to discuss the next steps for your business success and financial goals.  Use our search box for those posts specific to tax minimization, business planning, business best practices, casualty losses, etc. and see what “pop’s” up.