Household Finances and Cost of Living

CBS reports that the One Big Beautiful Bill Act, signed by President Trump last summer, created a new federal income‑tax deduction allowing many Americans to write off interest paid on loans used to buy new cars in 2025, with claims beginning this filing season. Taxpayers can deduct up to $10,000 per return in interest on loans for new, American‑assembled vehicles used primarily for personal purposes, and the benefit phases out above $100,000 in modified AGI for singles and $200,000 for married couples. Analysts estimate roughly 4 million of the 13.4 million new vehicles sold last year will qualify, with a typical eligible buyer able to claim about $4,000 in interest, at a time when average new‑car payments are nearing $750 a month and auto‑loan delinquencies are rising. The deduction is available whether filers itemize or take the standard deduction, but it does not apply to used‑car loans or leases, and the IRS and Treasury are still finalizing detailed guidance, telling taxpayers to rely on interim rules and consult preparers. To claim the break, filers will need 2025 loan statements and must complete a new Schedule 1‑A form, including their vehicle identification number, and can verify U.S. final assembly through an NHTSA VIN lookup.