Which form is typically associated with penalties for early withdrawal?

The correct answer is related to Form 1099 INT because this form is used to report interest income, including interest from bank accounts, bonds, and other investments. In the context of early withdrawal penalties, if an individual withdraws funds from a certificate of deposit or certain types of savings accounts before the maturity date, the financial institution may not only report the income earned but also any penalties for early withdrawal on the 1099 INT.

This reporting is essential for taxpayers because they need to understand their total interest income and any associated penalties that might affect their taxable income. Therefore, when taxpayers receive a 1099 INT and see an early withdrawal penalty noted, they can accurately adjust their income when filing their taxes.

Other forms like W-2, 1040, and 8889 serve different purposes: W-2 focuses on wages, 1040 is the primary tax form for individual income tax returns, and 8889 is specific to Health Savings Accounts (HSAs). None of these forms typically associates with the reporting of penalties specifically related to early withdrawals.