Back to Tax Deductions
QUESTION DETAIL
Related User
Votes
Is the interest you pay to a taxing authority tax deductible on Schedule A of the Form 1040? For example, if you underpay your 2012 taxes so they charge you 100 penalty and $10 interest. Is the $10 interest tax deductible on your schedule A?
ANSWER
The BIDaWIZ Team's Answer:
That's correct. Interest paid on tax penalties is considered personal interest. It is not deductible as per IRC section 163(h)(2)(E) and IRS Publication 17.
