9 Easy Ways to Reduce Your Tax Bill Series - Tip #2

Over the next weeks we are going to provide you 9 easy ways to reduce your tax liability - 2016 Edition. Every Monday and Wednesday we will be posting a new tip, so stay tuned!

Tax Tip #2

CD interest penalties are deductible. That's right; if you have been working with a financial advisor, and have decided on employment of a tax-advantaged investment strategy such as tax-free municipal bonds or tax deferrals in annuities or life insurance products, you may be contemplating moving money from a certificate of deposit or other savings accounts. Often, people delay changing the way their dollars are invested or stored, because there would be a penalty for early withdrawal. They don’t realize that part of that penalty would actually lower their income tax bill on the adjusted gross income: line 30, penalty for early withdrawal.