Vehicle Loan Tax Deduction Guide at Genesis of NW San Antonio in Boerne, TX

If you’re financing a new Genesis in Boerne, TX, there’s good news for taxpayers: a new vehicle loan tax deduction could help you save when you file your federal return. At Genesis of NW San Antonio, we’re breaking down how this benefit works, who qualifies, and what it means for drivers shopping for a luxury vehicle like the GV60 or other eligible vehicles.

Whether you’re planning your next purchase or reviewing tax strategies for 2025 and beyond, this guide helps you understand what the Genesis vehicle loan tax deduction covers and how to claim it correctly.

What is the Vehicle Loan Tax Deduction?

The vehicle loan tax deduction allows eligible buyers to deduct the auto loan interest paid on a qualified new vehicle from their taxable income. Unlike a tax credit that reduces your final tax bill dollar-for-dollar, this is an interest deduction that lowers the amount of income subject to taxation.

This new tax benefit is especially valuable for drivers who finance through traditional auto loans, where early payments often go toward interest. By deducting this interest, you may reduce your taxable income and increase your tax savings.

When Does the Vehicle Loan Interest Deduction Begin?

This vehicle loan interest deduction is set to take effect for vehicles purchased or financed on or after January 1, 2025, and it will apply to tax years through 2028. The Internal Revenue Service (IRS) may issue updates or extensions, so it’s important to stay informed with your tax preparer or CPA.

Who Qualifies for the Auto Loan Interest Deduction?

Both the vehicle type and the taxpayer’s income must meet specific guidelines:

Vehicle Eligibility

• New only: Pre-owned vehicles and leases do not qualify
• Assembled in the U.S.: Final assembly must occur at a U.S. facility
• Light vehicle classification: Must have a Gross Vehicle Weight Rating (GVWR) under 14,000 pounds
• Personal use only: No business, fleet, or commercial vehicles

Buyer Eligibility

• Modified Adjusted Gross Income (MAGI): Deduction begins phasing out at higher gross income levels
• Itemized tax return: You must itemize instead of taking the standard deduction
• Personal transportation: Must be used for personal – not business – driving
• Vehicle Identification Number (VIN): VIN-specific qualification applies; not all trims of the same model are eligible

Always confirm with your tax advisor that you qualify based on your income, loan type, and vehicle selection.

How Much Can You Deduct?

The current annual deduction limit is $10,000 in qualified interest per year per tax return. The actual amount depends on:

• Loan amount
• Interest rate
• Loan duration
• How much interest you paid within the tax year

Your lender’s interest statement, often included in Form 1098, will help determine this figure when you file your return.

What Counts as Qualified Interest?

Only the interest portion of your monthly payment qualifies, and it must meet the following:

• Paid to a legitimate lender (bank, credit union, dealership financing, or auto loan company)
• Loan used exclusively for a qualifying new Genesis vehicle
• Interest from personal loans, HELOCs, or refinanced loans does not qualify

This deduction only applies to original auto loans on qualifying purchases.

What Genesis Vehicles May Qualify?

To be eligible for the vehicle loan interest deduction, the model must be assembled in the United States. Genesis models such as the GV60, GV70, and GV80 may meet this requirement depending on the final assembly location. Be sure to verify your selected vehicle’s VIN for eligibility.

Your Genesis sales consultant at Genesis of NW San Antonio can help verify whether the specific trim and configuration you choose qualifies under IRS rules.

Can I Claim This Deduction and the EV Tax Credit?

Yes, but only if your electric vehicle qualifies for both programs. The EV tax credit and the vehicle loan tax deduction are separate provisions, and it’s possible for eligible Genesis EVs like the GV60 to qualify for both. You’ll want to:

• Confirm the vehicle is U.S.-assembled
• Finance it through a qualified lender
• Ensure it meets EV tax credit guidelines
• Track the interest paid over the year

Combining these incentives can lead to substantial tax savings when buying your next EV.

How Do I Claim the Vehicle Loan Tax Deduction?

You’ll need to wait until you file your 2025 tax return, but you can get organized early. Follow these steps:

• Keep all loan documentation and monthly payment records
• Request an interest statement from your lender (Form 1098)
• Verify the vehicle’s VIN matches IRS-qualified models
• Confirm your MAGI falls within the income limits
• Choose to itemize instead of using the standard deduction
• Work with a tax preparer or advisor familiar with new IRS rules

The IRS is expected to issue updated tax return instructions and a list of eligible VINs ahead of filing season.

Can I Use this Deduction if I Take the Standard Deduction?

No. The auto loan interest deduction only applies if you itemize your deductions. If your other itemized deductions are high enough to outweigh the standard deduction, this can offer additional tax benefits. Be sure to calculate both options when preparing your return.

Tax Services Tip: Check These Before You Finance

Before you finalize your purchase at Genesis of NW San Antonio, make sure to:

Select a new Genesis vehicle with final U.S. assembly

• Confirm the lender is eligible under IRS guidelines
• Review your annual interest totals on your car loan
• Track your gross income to stay within phase-out limits
• Avoid refinancing through personal or non-qualified loans

These steps help ensure that your auto loan interest deduction is accepted and fully applied to your tax return.

Why This Deduction Matters for San Antonio Drivers

At Genesis of NW San Antonio, we’re always looking for ways to provide extra value for our clients. The vehicle loan tax deduction gives eligible buyers an additional financial benefit for choosing a luxury Genesis vehicle while reinforcing the importance of buying U.S.-assembled models.

With financing incentives and the opportunity for real tax savings, now is the perfect time to plan your next purchase.

Visit Genesis of NW San Antonio to Start Your Vehicle Loan Today

Whether you’re eyeing a fully electric GV60 or a refined GV80, Genesis of NW San Antonio in Boerne, TX, is ready to guide you through the loan and tax deduction process. Our team will help you:

• Explore eligible Genesis models
• Set up qualified auto loan financing
• Review assembly and VIN qualifications
• Coordinate with your tax preparer or accountant

Take advantage of the vehicle loan interest deduction by financing your next Genesis vehicle with confidence. Visit us today to learn more.

*Disclaimer: This content was drafted with AI assistance for initial drafting, reviewed by a subject-matter expert for accuracy, and edited by our team of writers and editors.