Car Loan Interest Deduction Calculator 2026 β OBBBA Tax Savings
Calculate how much car loan interest you can deduct under the new OBBBA law. See your eligibility, phaseout reduction, and actual tax savings.
Eligibility Checklist & Calculation Breakdown
How to Use This Car Loan Interest Deduction Calculator
Enter your auto loan details, vehicle MSRP, income (MAGI), and filing status. The calculator applies OBBBA rules: the $10,000 annual cap, the $100,000 MSRP ceiling, the US-assembly requirement, and the income phaseout. Your actual tax savings equal the final deduction times your marginal tax rate.
OBBBA Deduction Formula
Phaseout % = max(0, min(1, (MAGI - threshold_low) / (threshold_high - threshold_low)))
Final Deduction = Base Deduction Γ (1 β Phaseout %)
Tax Savings = Final Deduction Γ Marginal Tax Rate
Example
Base deduction: min($2,100, $10,000) = $2,100
Phaseout: ($120,000 β $100,000) / ($150,000 β $100,000) = 40%
Final deduction: $2,100 Γ 60% = $1,260
Tax savings at 22%: $1,260 Γ 22% = $277
Key OBBBA Rules
- Loan must be for a vehicle purchased between 2026 and 2028
- Vehicle must be assembled in the United States (not just US-branded)
- Vehicle MSRP cannot exceed $100,000
- Maximum deductible interest is $10,000 per year
- Deduction phases out completely above $150,000 MAGI (single) or $300,000 MAGI (MFJ)
Loan Amount Optimizer
See how tax savings change across different loan amounts and interest rates
See how your tax savings shift at different loan amounts and interest rates. Assumes US-assembled vehicle under $100K MSRP and income within eligible range.
Tax Savings by Loan Amount & Interest Rate
| Loan Amount | @ 5% Rate | @ 6% Rate | @ 7% Rate | @ 8% Rate | @ 9% Rate |
|---|
Interest estimated as loan_amount Γ rate Γ 0.85 (approximate first-year interest). Tax savings use 22% marginal rate.