Do I deduct my early withdrawal penalty from my total CD interest received and only enter balance?

[dmertz]

You report whatever is on the Form 1099 by entering the amounts shown, without modification.

[DianeW777]

No.  You will enter the entire Form 1099-INT which will have a box for the penalty shown. Once you have entered the form correctly, TurboTax will enter the income and the penalty as an adjustment to income appropriately.

• Where do I enter Form 1099-INT?

You may need to check the box that your form has more boxes. See the image below.

[1597980]

I entered the amount of early withdrawal penalty, but I don't see Turbotax deduct that amount from my interest income.  Also, I received interest on a separate promissory note to a small business, I entered wire transfer fee as expense, it did not reduce my income either.  

[LindaS5247]

The early withdrawal penalty is an adjustment to income so it will reduce your gross income which reduces your adjusted gross income, not your interest income. When you enter your 1099 INT into Turbo Tax, the early withdrawal penalty will automatically be reported as an adjustment to income on your Form 1040.

Your adjustments to income are shown on Schedule 1 of Form 1040 and will flow to your Form 1040 onto line 10.

After you enter your Form 1099-INT, you can use these instructions to check your Form 1040 for the adjustment:

• Log in to your Turbo Tax account
• click on "take me to my return"
• Click on "my account" tab at the very top of the screen
• Click on "tools"
• Click on "view tax summary"
• Click on "preview my 1040". This is part of a narrow white bar at the very top of the screen
• When your 1040 form appears, you will be able to scroll through and look at the individual line items.
• Click the "back" button when you want to return to your main Turbo Tax screen. The back button is part of a narrow white bar at the very top of the screen.

Your wire transfer fees are deductible as a business expense on your Schedule C if you file one.  I do not know from where your post where you attempted to enter your wire transfer fees as an expense.

[1597980]

Hi, Linda,

Thank you very much for your response and detailed instructions.  I did find the adjustment for the early withdrawal penalty on CD. 

Regarding interest expense on a promissory note, I entered that interest in Schedule B - Interest and Ordinary Dividend.  I entered the wire fee in line 5 of 1099 Int worksheet.  I now realized that the 1099 Int I received didn't have this entry.  Schedule C is for business income but I don't own the business.  I lent some money to a friend's small business and she paid me interest on the loan.  The wire fee incurred when I wired out the loan amount. 

Thank you!