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tvlopienski
Returning Member

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

i withdrew an ira cd early and paid an early withdrawal penalty, is this deductible, if so where?

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Accepted Solutions
CynthiaR
New Member

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

Generating an early withdrawal penalty by taking money out of an IRA CD is not deductible.    It would just reduce the amount of money that is available in the future when you are ready to retire.  (Edited 2/13/19    11:53 pm)

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5 Replies
CynthiaR
New Member

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

Generating an early withdrawal penalty by taking money out of an IRA CD is not deductible.    It would just reduce the amount of money that is available in the future when you are ready to retire.  (Edited 2/13/19    11:53 pm)

Critter
Level 15

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

NO NO NO ... what happens INSIDE an IRA is never reported on an income tax return.  Do NOT put the penalty on the return this will get you an IRS letter later.
tvlopienski
Returning Member

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

Critter2, thanks for your prompt reply. Then what you are saying is that I cannot take the deduction for a early withdrawal on my ira cd now? Can I take a deduction for it once it matures and I take s full distribution then?
CynthiaR
New Member

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

See edited answer
Critter
Level 15

I withdrew an ira cd early and paid an early withdrawal penalty, is this deductible?

What happens is the early withdrawal penalty simply reduces the value of the IRA so you just have less to distribute later ... you will never get to deduct it in the long run ... this is the rules inside a TAX SHELTER ...like Vegas ... what happens in the IRa stays in the IRA.
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