topic Tax Year Prior to 2020: Early savings withdrawal penalty in Deductions & credits

Tax Year Prior to 2020: Early savings withdrawal penalty

CL1985 — Wed, 24 May 2023 19:04:04 GMT

In 2018, I had an early savings withdrawal penalty. In 2019, the bank repaid the penalty. How do I report this?

Re: Early savings withdrawal penalty

VictorW9 — Wed, 05 Feb 2020 22:30:39 GMT

Here's a TurboTax resource for you to consult:

Solved: I had a penalty on early withdrawal of savings of ...

Re: Early savings withdrawal penalty

CL1985 — Thu, 06 Feb 2020 17:08:09 GMT

The reply given does not answer my question. The question was "I reported the penalty in one year and the following year, the bank said the penalty was in error. So, they refunded my penalty paid. How do I report this income that was expensed in a previous year?"

Re: Early savings withdrawal penalty

Opus 17 — Thu, 06 Feb 2020 17:13:48 GMT

You have what is called a "taxable recovery," or the reimbursement of a previous deduction. This is taxable income in the year of the repayment to you. Report it on the income page. I believe taxable recoveries are included in the very bottom topic, "other uncommon income."

Re: Early savings withdrawal penalty

BillM223 — Thu, 06 Feb 2020 17:15:26 GMT

Since you did not deduct the penalty in the previous year (you didn't, did you?), then you don't report the refund of the penalty as income in the subsequent year.

Early savings withdrawal penalty

boydboyd01 — Mon, 15 Jun 2020 02:20:20 GMT

In 2018, I had an early savings withdrawal penalty. How and where in TurboTax do I report this?

Re: Early savings withdrawal penalty

VictoriaD75 — Mon, 15 Jun 2020 12:18:15 GMT

Is the penalty reported in box 2 of a 1099-INT? Follow these steps:

From the Federal menu, click on Wages & Income
Expand the menu for Interest and Dividends
Click Start/Revisit next to Interest on 1099-INT
Either Add another 1099-INT or click Review next to one already reported on your return
If starting from scratch, you may either import the 1099-INT or choose I'll type it in myself
Check the box My form has info in other boxes (this is uncommon).
Enter the Early withdrawal penalty in Box 2

Re: Early savings withdrawal penalty

Opus 17 — Mon, 15 Jun 2020 18:46:11 GMT

Remember the penalty must be deducted on your 2018 return, not your 2019 return. A 2018 return can't be prepared using Turbotax online, which only prepares the current tax season. You will need to be using Turbotax installed on your own Mac or PC. If you already filed a 2018 return, you can report the penalty by filing an Amended 2018 return.