Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Adjustments to Income Workout

Penalties for Early Withdrawal

Case Study 1: Form 1099-INT or Form 1099-OID

Gloria withdrew $5000 from a one-year, deferred-interest certificate of deposit in the current tax year. She had to pay a penalty of three months' interest and claim the penalty amount as an adjustment to income.

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Form 1099-INT