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March 30, 2022

What You Need to Know About the IRS’ New Interest Rates

By T. Thompson In Finance, Latest News with Comments Off on What You Need to Know About the IRS’ New Interest Rates

The Internal Revenue Service is raising its interest rates starting April 1, which could have consequences for people that file their taxes late.

As of April 1, the interest rate jumps 4% for overpayments, 3% for corporate overpayments, 1.5% for the portion of a corporate payment exceeding $10,000, 4% for underpayments, and 6% for corporate underpayments.

Unpaid taxes start accumulating interest on the due date, and it’s compounded daily. Americans also acquire interest on penalties for filing late.

If you file on time but neglect to pay the total balance, you will likely have to pay a penalty for a late payment — typically 0.5% of the tax you owe per month until the amount is paid in full.

This year, the tax-filing season ends April 18 — not the usual April 15 date, due to the federal observance of Emancipation Day.

The IRS said it has already issued 45 million refunds to taxpayers — totaling $152 billion as of March 11. So far, the average payment has been $3,352.


Source:

IRS to raise interest rates in April: What to know

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