Can I deduct penalty payments from my taxes?

by Edward Melia, CPA

I paid IRS penalties and interest last year for a prior tax year. Are these payments valid deductions against my income last year?

Sorry. The law says that interest expense and penalties paid to the Internal Revenue Service for the current year or for a prior year’s tax liability are not deductible by individual taxpayers.

Edward A. Melia is a certified public accountant and an attorney in Sacramento. You may contact him at (916) 441-2006 or at ed@edmelia.com.

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