The Big Beautiful Bill’s New Car Deduction Explained

If you live in the Green Bay / De Pere area and are starting your year-end planning, here’s a fresh insight you’ll definitely want on your radar for your tax prep this season. As part of the new federal tax law (commonly dubbed the “One Big Beautiful Bill Act”, or OBBB) effective for the 2025 tax year, individuals may now deduct up to $10,000 of interest paid on a qualifying auto loan — even if they take the standard deduction. (Schwartz & Schwartz)

Here’s what to know:

• The deduction applies for tax years 2025 through 2028. (Schwartz & Schwartz)

• It’s for personal-use vehicles (not business) that meet certain criteria: the vehicle must be new, originally used by you, and “assembled” in the U.S. (Kiplinger)

• Income phase-outs apply: singles over about $100,000 and joint filers over about $200,000 start to lose eligibility. (Duane Morris)

• The deduction is “above-the-line,” meaning you don’t have to itemize to claim it. (CBS News)

  
  

Why this matters for folks in Green Bay & De Pere

Whether you’re buying a new car or SUV in the Green Bay region for personal use, this federal change could reduce your taxable income — a welcome boost when you’re doing your tax prep. For example, someone who financed a new car assembled in the U.S. could deduct part of the interest payments, which lowers adjusted gross income and may help with other tax-phase-outs or benefit qualifications.

A smart local tip for your tax prep appointment

When you come in for your tax prep meeting, bring the auto-loan agreement, verify the vehicle’s final assembly label (look inside the driver’s door frame) and note that it’s not being used for business. Also include your loan interest paid for the year, and your income figures. In De Pere, we often see families juggling new vehicle finance and standard deduction strategies — this law adds a new dimension to that decision-making.

Final thought

While it’s not a full write-off of the vehicle purchase price, the new deduction is meaningful. It’s an example of tax law shifting toward everyday purchases, not just business expenses. If you’re in Green Bay or De Pere and gearing up your 2025 tax prep strategy, this is one we’re asking every client about. As always, this is a strong reason to talk early with your CPA so you don’t leave potential savings on the table.

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