Joseph cashed in a CD early because he needed money quickly to buy a new car. Unfortunately, the bank charged him an early withdrawal penalty of 5% which amounted to $250. Can Joseph deduct the penalty on his taxes and, if so, how much can be deducted?

a) No, Joseph will not be allowed to deduct any of the early withdrawal penalty.

b) Yes, but Joseph can only deduct the early withdrawal penalty if he uses Schedule A and itemizes his deductions.

c) Yes, but only half of the early withdrawal penalty may be deducted.

d) Yes, Joseph can deduct $250 on line 30 of Schedule 1 (Form 1040) as an adjustment to income.