Interest Rate Increase For Overpayments and Underpayments

The IRS recently announced that it would be increasing interest rates for the fourth quarter of 2022. Under the Internal Revenue code, the rate of interest is determined on a quarterly basis.

Beginning on October 1st of this year, the rate for over payments and under payments for individuals will be 6% per year compounded daily. This is up from 5% from Q3.  For corporations, the interest rate for over payments will be 3.5%, and 5% for overpayment exceeding $10,000. The interest rate for corporate underpayments is 6%, or 8% for large corporate underpayments.

The underpayment and overpayment interest rate for individuals is determined by taking the federal short-term rate plus three percentage points. For corporations, the interest rate for underpayment is generally the federal short-term rate plus three percentage point and plus two percentage points for over payment.

For more information on how the new interest rate increase will affect you or your business contact the professionals at the law office of Mary E. King, P.L. by calling 941-906-7585 or visit them online at taxlawyerflorida.com.