Big news for lenders, borrowers, and tax professionals!
Under the One Big Beautiful Bill Act (OBBBA), a new federal tax deduction for car loan interest takes effect—and the IRS has just issued transition relief for 2025. Here’s what it means for you:
Who Qualifies?
To qualify for the new car loan interest deduction:
For 2025, the IRS will not impose penalties on lenders who make a good-faith effort to comply with the new reporting requirements for interest payments of $600 or more.
Lenders can meet these requirements by providing borrowers with the total amount of interest paid through any of the following methods:
Even loans issued before July 4, 2025 (the date OBBBA was signed) may qualify—as long as they meet the eligibility criteria above.
What You Should Do
For Lenders:
For Borrowers:
For Tax Professionals:
This new deduction could offer significant savings for qualifying vehicle owners and create new compliance steps for lenders. We’ll continue monitoring IRS updates to help our clients stay ahead of these changes.
If you have questions about how this impacts your business or your clients, contact Sai CPA Services today for personalized guidance.
SAI CPA Services offers expert tax, accounting, and financial solutions with 25+ years of experience. We ensure accuracy, compliance, and growth.
Copyright © 2025 – Powered by SAI CPA SERVICES
SAI CPA Services offers expert tax, accounting, and financial solutions with 25+ years of experience. We ensure accuracy, compliance, and growth.
Copyright © 2025 – Powered by SAI CPA SERVICES