Hey everyone!
Bought a new car in the last year or two? There's a decent chance you're sitting on a tax break you don't know about. Let's get into it — plus a few other things that quietly changed this month that could affect your wallet.
🚗 That Car Loan? It Might Be Tax-Deductible.
Here's one most people miss: if you bought a new car, truck, SUV, van, or even a motorcycle after 2024 for personal use, you can deduct up to $10,000 of the interest you paid on the loan — whether you itemize your deductions or just take the standard one.
A few rules to know before you get too excited:
- 🆕Has to be new — "new to you" doesn't count. The vehicle has to be new to everyone. Leased it and bought it out at the end? That usually doesn't qualify either.
- Has to be assembled in the U.S. — you can check this using the VIN or the sticker on the car itself.
- 💰Income limits apply. This starts phasing out at $200,000 (joint filers) or $100,000 (everyone else), and disappears completely above $250,000 / $150,000.
- ⏳It's temporary. This break only exists for tax years 2025 through 2028 — unless Congress extends it.
It's like a coupon that came stapled inside your loan paperwork and nobody told you to look for it. If this sounds like you, make sure your tax preparer knows about the loan — you'll need your VIN handy for the paperwork.
💍 Good News If You're Not Ultra-Wealthy: The Estate Tax Barely Touches Anyone
Only about 7,000 estate tax returns get filed each year nationwide, and even fewer than that actually owe anything. Why? The exemption is now $15 million per person for 2026. Unless you're leaving behind a small empire, this isn't something you need to lose sleep over.
📊 The Investment Tax Most People Don't Realize They're Paying
If your income (plus your spouse's, if you file jointly) tops $250,000, there's a lesser-known 3.8% surtax on investment income — dividends, capital gains, interest, rental income — called the Net Investment Income Tax. Because the income thresholds never get adjusted for inflation, more and more people cross into this every year without realizing it, kind of like a doorway that keeps getting shorter while you stay the same height.
One important wrinkle: if you live and pay taxes abroad, foreign tax credits cannot be used to offset this particular tax — the courts have made that crystal clear this year, even under treaties with countries like France and Canada.
🎬 Coming Attractions: A Tax Break for Hollywood?
There's real bipartisan momentum building for a federal tax credit to bring movie and TV production back to the U.S. Nothing's signed yet, but it's worth watching if you're anywhere near that industry.
🔍 The IRS Is Auditing... Less
Individual audits dropped from 400,000 to 307,000 in just two years. Big business audits fell by more than three-quarters. This isn't necessarily a "get out of jail free" card — it's mostly a story about the IRS losing about 10,000 employees. Worth knowing, but not worth changing your behavior over.
🖥️ One IRS Tool Actually Worth Using
If you ever need to prove to a lender, landlord, or employer that you're all paid up with the IRS, there's now a downloadable Tax Compliance Report available right from your online IRS account — no waiting on hold required. While you're in there, you can also check refund status, set up a payment plan, and view notices digitally.
🎯 The Bottom Line
Taxes rarely announce themselves — the car loan deduction is a perfect example of a break that's just sitting there waiting for someone to claim it. A few minutes double-checking with your tax preparer this fall could be worth real money by spring.
Did you buy a new vehicle in the last year? Curious if this applies to you? Drop a comment or send me a message — happy to help you figure it out.
Disclaimer: This is educational content, not personalized tax advice. Tax rules are detailed and situation-specific — always confirm your own timeline with a qualified tax professional.