IRS raises interest rates for underpayments and excessive payments
Kevin Hassett (ex-Chairman of the Council of Economic Advisers) discusses IRS’ delay in implementing its tax rule for Venmo and PayPal payments exceeding $500 and his concerns about Kudlow.
The IRS For overpayments or underpayments, the interest rate will be increased in the first quarter 2023. This is effective Jan. 1.
Washington, D.C., IRS headquarters, February 25, 2022 (Al Drago/Bloomberg via Getty Images/ Getty Images
Individuals pay more than what is owed at a given rate. taxes owed The salary will be compounded daily at 7% per calendar-year, which is a 6% increase over the previous quarter.
The federal tax collection agency The statement states that the interest rate for corporate overpayments will rise from 6% to 4.5% for individuals with incomes above $10,000.
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IRS 1040 Individual Income Tax Forms (Daniel Acker/Bloomberg via Getty Images/Getty Images
Corporate underpayments of large amounts are subject to a 9% interest rate
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The Internal Revenue Code states that the IRS sets interest rates quarterly. The federal short term rate plus 3 percentage points is used to determine individual rates.
The IRS homepage as seen from a computer screen using a magnifying device (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images
Underpayment rates for corporations Individuals pay the same rates as individuals for overpayments. The rates for companies are however two percentage points higher that the federal short-term rates.
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The new rates were calculated at federal short-term rate Starting October
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