Can I deduct my early withdrawal penalty from my IRA on line 30 on form 1040? If so how do I do that on Turbotax?

[Carl]

Why should you not pay a penalty? I assume the penalty is because it was an early withdrawal.

[macuser_22 · Accepted solution]

The early distribution penalty goes on line 59 on the 1040 form, not line 30.

Depending non the code in box 7 on the 1099-R form TurboTax will enter it for you.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

[Coleen3]

Line 30 indicates that you took money from a CD. This is deductible. If you had a penalty from an early distribution, that is a tax, not a deduction. Whereas in the first instance the bank charged you a penalty which is deductible, in the second it is the IRS that is charging the penalty. It is not deductible.