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Are early withdrawal penalties tax deductible?

April 26, 2017deductible early penalties tax withdrawal

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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.