[00:00:00] All right, we've got an awesome deduction opportunity to mention here. It's for practically everybody. So I know a lot of the deductions I talk about are for rental property owners or business owners, or someone that really wants to get creative with their investments. This one though, is for anyone that has a vehicle.
If you bought a new vehicle in 2025 through 2028 and you've got interest and you bought it with a loan, you've got interest on that loan. That is a potentially a deduction for you. So I'm in this, in this episode, I'm gonna talk about the limitations on it. Specific steps to follow if you want to take the deduction and how it differs from some of these other possible deductions.
So if you, if you filed your tax return before, which of course you probably have, there are personal itemized deductions, which is one of the just really important deductions that you wanna gather. It's like a mortgage interest on your home, property taxes, charitable donations, potential medical deductions.
Those are itemized deductions. And there, there may have been years where you didn't have a lot of 'em, and you just didn't even have to worry about 'em because everyone, if you file a married tax [00:01:00] return, you've got like a $30,000 just free. Itemize or free standard deduction, you can take This deduction that we're talking about today is the vehicle interest deduction on a loan for a personal vehicle, it does not apply.
It's a separate type of deduction from those personal, other personal deductions. So even if you don't have a home, you don't have charity, you don, you've donated, but you had a loan on a new vehicle, make sure you get that information 'cause that will be worth it to pull it together and add it to your tax return because it will directly reduce your taxable income.
Without all the limitations for the personal, the itemized, and the standard deduction limits, it'll just directly reduce your taxable income. So it'll have a direct impact on you if you've got, if you've got this and you follow, qualify it. So these are some of the limitations to consider. So it needs to be a new vehicle.
So brand new vehicle, not just new to you, like a new vehicle rolls off the manufacturer lot, sold it the dealership type of thing. It needs to be a brand new vehicle. You need to have a loan [00:02:00] on it. Of course, to, to deduct interest, you need to actually pay interest. Uh, it needs to be purchased 2025 through 2028.
And it needs to be assembled in the United States, or Final Assembly needs to be done in the United States. So there is a website, I'm gonna read it to you, but you can Google it and you, you should be able to find it pretty quick, but it's a VIN decoder and it'll tell you where your vehicle was ultimately made like, and if it qualifies for this, if it was made in the United States.
Uh, but it's VPIC. nhtsa.dot.gov/decoder, so vick.nhtsa.dot.gov/decoder and yous. If you search like VIN decoder for interest, loan interest deduction, you'll be able to find it as well. But go there, put your information in and decode the vin. If you're, if you're not a hundred percent sure if your vehicle was, would qualify in final assemblies in the United States.[00:03:00]
I would just send your information in whether you're doing your own tax return or you're having us or someone else do it. Just give your information like you need your total loan or the total loan interest paid and you need your vin. And if you've got those two things and like the model year of the vehicle, make model, and year of the vehicle, we can add that deduction to your tax filing.
So make sure you do that. It's worth a couple minutes or a few minutes gathering that information because you can deduct this. Um, it's, it's a four year deduction, 25 tax year, 25 through tax year 2028. It's worth it to pull that, that information together, but there are some other limitations, so maybe it's not worth it.
And I'll tell you in some of the cases where it might not be worth it because you might not qualify anyways, if your taxable income, you fi if you file a married tax return, if your taxable income. Is $200,000 or less, you qualify. That's for a married filing and it phases out. You can deduct part of it up till you get like to 250,000, and if you're single, [00:04:00] a single filer up to a hundred thousand dollars, you can deduct all the loan interest in your car.
But at 150,000 up to 150,000, you can only deduct part of it, and then above one 50 can't deduct any of it. But if you don't know for sure what your taxable income will be. I would just pull it together, send the information over it. It's worth a shot to see if you can, you can take the deduction on it because it directly reduces your taxable income.
It's different from those personal deductions I mentioned. Um, so we talked about the limitations of it. So remember, it needs to be a brand new vehicle, um, purchased in 2025 through 2028. You need to meet the income qualifications, so less than $200,000 if you're married, filing joint less than a hundred thousand if you're single filer.
Uh, it needs to be Final Assembly United States. I gave you the Vin decoder website, and then you'd file it. It's a, it's a Schedule one A. You probably don't, you don't even need to remember that schedule number, but it's a, it's a schedule that's filed with your income tax return, [00:05:00] uh, that you're filing. By April 15th every year.
Anyways, so as you're gathering your documents, if you're using Bemington Company to file, we have it as one of the questions in our questionnaire. Just upload the documentation there. If you're doing it on your own, just make sure whatever you're using, just. Make sure you, you have that as an opportunity to potentially save some taxes on it, but it's, it, it could save you quite a bit of taxes in those higher tax brackets.
And loan interest rates are not very low right now. They're, it's common to see seven, eight, 9% vehicle loan loan rates right now. So if you've got one, make sure you're not missing this deduction for 2025 through 2028. Have a good rest of the day. See you.
