Anyone that bought a 2025+ remember to file your taxes

[Farmer Fran]

Has to be in a certain time frame. but,


From Google AI

"The 2025–2028 federal car loan interest deduction allows taxpayers to deduct up to $10,000 annually of interest paid on loans for new, U.S.-assembled personal vehicles. It is a tax-filing deduction (not a rebate) that lowers taxable income, applicable for loans originated after Dec. 31, 2024, with income limits starting at $100,000 (single) or $200,000 (joint)

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[Westphal]

Our 1st payment wasn't until January, so we just missed the cut-off. Luckily, this means I'll have a full year of car payments in 2026 when I file my taxes next year.

 

[Wiley Marmot]

I refied my GT loan last year for a lower interest rate. Wonder if I'm eligible for that deduction? Hhhhmmmm????

PS: Thanks for the tip!

 

[Starship Enterprise]

Every time I try to add itemized deductions in the past few years....including mortgage interest, it is a lower value than the standard deduction and therefore not usable.

 

[ohioguy]

do the loan companies issue a 1098 of some type?

 

[smurfslayer]

Every time I try to add itemized deductions in the past few years....including mortgage interest, it is a lower value than the standard deduction and therefore not usable.

Yeah, welcome to the Donut hole of the federal tax code. Last couple of years it's been "missed it by THAT much.

 

[Junkyard Dog]

Every time I try to add itemized deductions in the past few years....including mortgage interest, it is a lower value than the standard deduction and therefore not usable.

Yeah, welcome to the Donut hole of the federal tax code. Last couple of years it's been "missed it by THAT much.

You can take this one even if you use the standard deduction, so, if you have a car note, get the interest and put it on your taxes as a deduction and save a couple few hundred bucks in taxes.

PS - Charitable deduction for 2025 is available even if you take the standard deduction. So there are two you might be able to use.

 

[exm]

If only the income limits didn't exist.... Would have financed it and written off the interest for sure!

 

[Junkyard Dog]

If only the income limits didn't exist.... Would have financed it and written off the interest for sure!

It only makes a few hundred dollars difference in taxes, and that money paid in interest is gone forever. Paying a couple grand in interest to save a few hundred in taxes is bad math.

 

[exm]

It only makes a few hundred dollars difference in taxes, and that money paid in interest is gone forever. Paying a couple grand in interest to save a few hundred in taxes is bad math.

There are incentives for financing a car, so using this plus strategizing paying off the car early could be beneficial.

But yes, financing a car in general is not recommended.

 

[Farmer Fran]

It only makes a few hundred dollars difference in taxes, and that money paid in interest is gone forever. Paying a couple grand in interest to save a few hundred in taxes is bad math.

Yes, but anyone who did can recover some, no?

 

[Westphal]

I had enough money saved up that I could've paid cash for our Mustang. Since I got a decent rate, I decided to invest that money as it'll make more money than I'll pay in interest. The tax deduction is icing on the cake.

 

[Junkyard Dog]

Yes, but anyone who did can recover some, no?

Sure. If you have a loan, take the deduction. I recommend the same. It is why I made sure to correct the facts up above and point out for anybody reading (most forum users have a note and are paying interest on a loan for their Mustang) that you do not need to itemize to take this deduction.

I also pointed out that the charitable deduction is available for 2025 (up to $1000).

The Tax Cuts and Jobs Act raised the standard deduction so high that most most folks no longer itemize (a single digit percentage still itemized after 2018, rising to about 14% now). The One Big beautiful Bill - bill er, act? made these two deductions available for folks who take the standard deduction, which is $31,500 for 2025 for a married couple (and inflation adjusted moving forward).

I had enough money saved up that I could've paid cash for our Mustang. Since I got a decent rate, I decided to invest that money as it'll make more money than I'll pay in interest. The tax deduction is icing on the cake.

Eh, ok. I mean, this is not going to make your future. Once you back out the cost of the financing and subtract the tax load on your investment and factor in inflation, and subtract out what your returns would have been had you purchased the car with cash and then invested the car payment amounts over the life of the loan (most folks forget to add in this last step and so have a skewed vision of what the real difference in return is) it is probably not a large enough amount to make this a brilliant investing move that makes the future so bright you gotta wear shades. I understand the appeal, however. My home mortgage is at 2.00%, and when inflation went over 9%, I thought it would be silly to make any extra payments aimed at paying it off early. I am still not making any extra payments to it, but it will be paid off prior to retirement just by remaining on schedule. Inflation has continued to run higher than that mortgage interest every year, even now.

You do have to recognize, however, that most of the participants here do not have $60,000 in their checking account trying to decide, do I take that 3.9% Ford Motor Credit financing and invest this $60,000 hoping to get a better return after taxes, or do I purchase the car with cash and just invest out of my income?

And most folks take the loan, make the payments, and spend all or some of the $60k instead of investing the entire thing. And some invest in the summer of 2008 and watch the value plummet by 50% and panic and sell, locking in their losses, with $30k now in a safer investment and saddled with car payments.

Anyway, debt free and investing from your income without worrying about debt payments is probably the wiser choice (and yes, I am not living 100% in conformity with that, as I would apply an extra 100 bucks to investments rather than to my absurdly low interest rate mortgage balance, so you can call me a hypocrite if you want).

 

[ohioguy]

1098-VLI for those that care.

 

[tktrain]

It only makes a few hundred dollars difference in taxes, and that money paid in interest is gone forever. Paying a couple grand in interest to save a few hundred in taxes is bad math.

I paid for my Dark Horse when I picked it up. My aunt passed away and left me enough to pay for a '25 DH Premium. I do have several charitable donations it sounds like I can deduct now!

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