Is Interest and Penalties You Paid To The IRS – Deductible?

by Michael Lodge

Many times clients file late and owe money.  By the way, just because you filed an extension to file your tax return and you owe taxes – it does not stop interest and penalties.  When this happens clients will always include that in their worksheet showing taxes paid.  Is it deductible?

Question: Is the interest amount that we paid to the IRS deductible?


Interest and penalties paid to the IRS on federal taxes are not deductible.

That was a very quick response.  So if you do have to pay interest and penalties for paying your taxes late – sorry – no deduction.

For more information, refer to:

  • Items You Cannot Deduct in the Interest Expense chapter in Publication 17, Your Federal Income Tax for Individuals
  • Publication 529, Miscellaneous Deductions

If you need tax help call our office at:  877.778.1770