Adoption Tax Credit to pay for early withdraw Penalties?
I am wondering if I could use the remaining Adoption tax credit to cover penalities for withdrawing from my TSP early. If so I’d like to do that so the credit won’t goto waste. Then I could put that money into an IRA the next year and reap the tax benefits.
Accounting Sites
- Six Months to Go Until The Largest Tax Hikes in History « Faulk For Congress
- TSP Cutman Rubber Review
The adoption credit would be entered on line 54 of your 1040, which is netted with any other taxes and credits on line 57. The penalty for early withdrawal isn’t entered until after that, on line 60, so no, the adoption credit can’t be used against the early withdrawal penalty. It could be used against any income taxes due on the withdrawal though, just not on the penalty.