Is there a deduction for payment in 2022 tax year that was paid after audit and penalty on a 2020 tax return.

Forum|Forum|3 years ago
April 18, 2023
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A mistake was made on 2020 Federal tax return. The IRS audit resulted in a $1500 payment being made in 2022 to correct the 2020 return. Is the payment made in 2022 deductible or a tax credit on the 2022 return? If so, how/where is it entered in Turbo Tax 2022 return?

Tnx. G

Best answer by xmasbaby0

I HAD TO PAY BACK TAX OWED

The money you paid to the IRS for a previous year’s federal tax return is not deductible, so you do not enter it anywhere on your 2022 return. If you paid taxes due in 2022 to your state or local government, you can enter that by going to Federal> Deductions and Credits> Estimates and Other Taxes Paid> Other Income Taxes. You can enter the taxes you paid, but do not include any penalties or interest.

There are several states that allow you to enter the federal tax you paid on your state return--Alabama, Iowa. Missouri, Montana, and Oregon. If you are filing in one of these states watch for the deduction when you prepare your state return.

xmasbaby0

Answer

Level 15

I HAD TO PAY BACK TAX OWED

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