Are early withdrawal penalties tax deductible?
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| Generally, yes, early
withdrawal penalties are tax deductible provided the interest has been included on your
IRS form
1099-INT or IRS form 1099-OID. If you make an early withdrawal from a time deposit
account, such as a certificate of deposit, any early withdrawal penalties
are tax deductible. You report the full amount of interest received or credited
on your tax return and deduct any forfeited amount on Line 30 of
Form 1040. |
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| Related tax
information about Early Withdrawal Penalties |
Tax Directory Topics:
Adjustments to Income
Interest
|
IRS
publications about
Early Withdrawal Penalties:
If you need additional information refer to IRS Publication 550, Investment
Income and Expenses. Also see IRS Publication
17, Your Federal Income Tax. Please
read this IMPORTANT Editor's Note
regarding navigating IRS Publications with Adobe Acrobat Reader.
IRS Publications can also be ordered by calling
1-800-829-3676. |
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