The payment of taxes encompasses all of the following:

1. A tax overpayment from a previous tax year that has not been refunded.
2. An employer withholds money from wages.
3. Payment can be made directly by the individual or someone else on their behalf.
4. When an employee has two or more employers during a tax year who withhold more than the FICA tax ceiling, it is called excess FICA withholding.
5. The prepayment of tax includes a refundable tax credit as well.

Prepayment of tax liabilities is what payment of penalties is considered, so it is not deductible.