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February 2, 2025
Question

IS auto loan interest tax deductible? If so, where do I enter the interest paid in TurboTax?

  • February 2, 2025
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    1 reply

    February 2, 2025

    No, auto loan interest isn't deductible for personal vehicles.  However, if you are self-employed and you used the vehicle for business purposes, you may be able to deduct some of the interest expense.

     

    In order to claim the interest for a business, here are the steps:

    1. Navigate to Federal > Wages & Income > Self-employment income and expenses
    2. Edit your business if already started or add the business
    3. Choose add expenses for this work
    4. Select Vehicle
    5. Choose pencil icon to the right of newly added vehicle
    6. Complete interview regarding the vehicle
    7. You will come to a screen that tells you the standard mileage deduction.  If all your vehicle expenses, including the interest, are less than the standard, you have completed your vehicle expenses and can choose "I'll take the standard mileage deduction"
    8.  Otherwise, choose "I'll enter my actual expense" and proceed, inputting your interest, gas, insurance, etc.