Can I deduct previous years tax penalties from the year in which I paid the penalty?

Question

I was assessed a penalty for 2006 federal taxes. Can I claim this amount as a deduction for my 2008 taxes?Also, how do I deduct for IRA contributions?

Answer 1

Sorry, penalties and interest are not deductible, but the back taxes themselves are deductible as an itemized deduction.

Contributions to a traditional IRA, if you qualify, are deductible as an "above the line" (near the bottom of the front of Form 1040) adjustment, lowering your total income as you compute your adjusted gross income.  Don't forget to take the Retirement Saver's Credit too if you qualify (back of Form 1040).

Answer 2

Penalty and interest payments are never deductible. You deduct the IRA contribution as an adjustment to income on the first page of a 1040 form.  

Answer 3

Penalties, fines, etc., are NOT deductible.  Thta would be like a trucker deducting the fine for a speeding ticket.

Answer 4

Tax penalties are never deductible.  

You can deduct contributions to a Traditional IRA on the first page of the tax return.  You cannot deduct contributions to a Roth IRA.

Answer 5

The only way delinquent tax would be deductable is if it was an itemized deduction on your federal Schedule A for state tax the year it was paid.  But related penalties/interest are never deductable anywhere.

And I seriously doubt if any state allows you to deduct state or federal income tax.

Answer 6

Nope.  Penalties and interest for late payment are never deductible.