These follow the Schedule 1-A Part IV worksheet line by line, and the car loan checker reproduces each one.
Example 1: the standard check
Interest paid $7,000, none deducted elsewhere, single, MAGI $124,200. The amount under the $10,000 cap is $7,000. Excess over $100,000 is $24,200, which Part IV rounds UP to 25 thousands. Reduction: 25 x $200 = $5,000. Deduction: $2,000. Compare the other deductions: at the same income, their round-down maths would have taken $4,800. The rounding direction is worth $200 here.
Example 2: one dollar over
Interest $10,000, single, MAGI $100,001. The excess is $1, but Part IV counts any part of a $1,000 as a whole one: reduction $200, deduction $9,800.
Example 3: the business offset
A driver paid $9,000 of interest and deducted $4,000 of it on Schedule C as a business expense. Part IV’s column subtracts it first: only $5,000 enters the worksheet. At MAGI $90,000 there is no phase-out: deduction $5,000.
Example 4: how fast it vanishes
Interest at the $10,000 cap, joint return. At MAGI $200,000 the deduction is the full $10,000. At $225,000 the excess is 25 thousands, the reduction is $5,000, and the deduction halves to $5,000. At $250,000 the reduction reaches $10,000 and the deduction is zero. Fifty thousand dollars of income wipes out the entire deduction; no other new deduction phases out this fast.