Does your car loan qualify for the interest deduction?
New vehicle, final assembly in the US, under 14,000 lbs, personal use, loan after 2024 and secured by the car. Lientally checks each loan and says why one doesn't count.
The rule
For 2025 through 2028 you can deduct interest on a loan taken out after December 31, 2024 to buy a new car, SUV, van, pickup or motorcycle under 14,000 lbs GVWR, for personal use, with final assembly in the United States and secured by the vehicle (IRC §163(h)(4), Treas. Reg. §1.163-16). The deduction is capped at $10,000 per return and drops by $200 for each $1,000 (or part) of modified AGI over $100,000, or $200,000 filing jointly (IRS). Leases, used vehicles and business loans don't count. You claim it on Schedule 1-A with each vehicle's VIN, itemizing or not.
Final assembly
The vehicle information label on the door frame or window sticker shows the final assembly point, and NHTSA's VIN decoder shows the plant. A VIN starting with 1, 4 or 5 was made in the US, but that alone isn't proof of final assembly: Lientally marks those loans as "confirm".
Your loans stay on your computer
Lientally reads your loan list with JavaScript in this browser tab. Nothing is uploaded, and closing the tab clears it.
How it works
- List your car loans in the template (or any CSV or Excel sheet) with each VIN, loan date and the interest from your lender — and drop it here, or try the sample.
- Pick the tax year and filing status and type your MAGI, then read the deduction, Schedule 1-A lines 23–30 and every check.
- Compare with your lenders' Forms 1098-VLI and copy the lines onto Schedule 1-A.
FAQ
Is my data uploaded?
No. Your files are read by JavaScript in your browser tab and never sent to us or anyone else. Loans and VINs aren't stored, so closing the tab clears them. Settings can be saved in this browser.
What does Lientally do?
It reads a list of your car loans, checks which qualify for the car loan interest deduction (IRC §163(h)(4)), takes out non-vehicle amounts and business use, applies the $10,000 cap and the MAGI phaseout, and fills in Schedule 1-A lines 23–30 for 2025 through 2028.
Which loans qualify?
A loan taken out after December 31, 2024 to buy a new car, SUV, van, pickup or motorcycle under 14,000 lbs GVWR, with final assembly in the United States, for personal use, secured by the vehicle. Leases, used vehicles and business or fleet loans don't qualify.
How is the phaseout worked out?
$200 for each $1,000, or part of $1,000, of modified AGI over $100,000 ($200,000 married filing jointly). Married filing separately: $100,000 and a separate $10,000 cap per spouse.
What's free?
Importing any number of loans, the deduction, Schedule 1-A lines 23–30, every check, the first 2 loans and the first 2 tax years on screen and in print (with a footer). Pro shows and prints everything and exports the Excel workbook and both CSVs.
Where does the interest come from?
Your lender's statement or Form 1098-VLI if you have it. Otherwise Lientally estimates it from the amount financed, APR, term and first payment date; late or extra payments change the real figure.
What isn't covered?
State taxes, vehicles bought for a business, loans from related parties, and the 2026 form's line numbers if they change. Your lender's 1098-VLI and a tax professional come first.
Is this tax advice?
No. Lientally applies the rules it describes to the numbers you provide. It is a worksheet to check against your lenders' figures.