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

Adjustments to Income Workout

Penalties for Early Withdrawal

Case Study 2: Penalty on Early Withdrawal of Savings

Trudy has one Form W-2 and one Form 1099-INT and no other income. Her Form 1099-INT shows both interest income and an early withdrawal penalty. Trudy does not pay alimony, and she did not make a contribution to a traditional IRA.

Trudy can claim the adjustment for the penalty on early withdrawal of savings on Form 1040.

Click here for an explanation.