by Michael Lodge
Many times we get new clients in that own businesses or just individuals filing a tax return who have been late or had taxes due that they paid interest to the IRS on. They will make a strong argument that they should be able to take the interest as a deduction on their tax returns. Afraid to say, it is not going to happen. The IRS says no, interest and penalties paid to the IRS is not 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.
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 have tax help call our office at: 877.778.1770