If the interest is posted to your account, then you claim it on your income tax return in the year you received the interest. If you do an early withdraw and have a penalty, you'll be able to claim the early-withdrawal penalty on your Form 1040, Schedule 1, Part II Adjustments to Income, Line 17.
- A cash basis taxpayer is a taxpayer who reports income and deductions in the year that they are actually paid or received.
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