At Pilson Ford of Clinton, we are committed to helping our customers make the most informed financial decisions when purchasing a new vehicle. The recent enactment of the One Big Beautiful Bill Act presents an exciting opportunity for car buyers to benefit from significant tax deductions on vehicle loan interest. Here’s what you need to know:
**Understanding the New Vehicle Loan Interest Tax Deduction**
Under the new law, up to $10,000 per year of interest paid on auto loans for new vehicle purchases is tax-deductible, provided all vehicle and customer eligibility requirements are met. This deduction is a fantastic way to reduce your taxable income when you file your tax return.
**Eligibility and Timing**
The tax deduction is available for new vehicles financed on or after January 1, 2025, through December 31, 2028, covering tax years 2025 to 2028. It’s important to note that the interest must be from new debt contracted on or after January 1, 2025.
**Income Caps and Deduction Limits**
To qualify, individual customers must have an income of $100,000 or less, and married couples filing jointly must have an income of $200,000 or less. The deduction begins to phase out above these thresholds. The total annual deduction is capped at $10,000 in qualifying interest payments.
**Vehicle Qualifications**
Eligible vehicles include Ford’s new EV and ICE vehicles under 14,000 lbs with final assembly in the U.S. At Pilson Ford of Clinton, we are proud to offer a wide range of Ford vehicles that qualify for this deduction, ensuring you can take full advantage of these savings.
**Additional Considerations**
- The deduction applies whether you itemize deductions or take the standard deduction.
- Only personal use vehicles qualify, excluding business or commercial entities.
- Refinanced loans can qualify if they meet specific criteria.
**How to Claim Your Deduction**
Eligible customers must claim the deduction to reduce their taxable income when filing their tax return. Keep detailed records of the interest paid and consult with a tax professional to ensure you maximize your benefits.
At Pilson Ford of Clinton, we are here to assist you in navigating these new opportunities. Visit our New Vehicle Inventory to explore our latest models and find the perfect Ford vehicle that aligns with your financial goals. For more information, feel free to contact us or visit our dealership today.