The IRS has announced that interest rates will remain unchanged for the calendar quarter beginning October 1, 2024. For individuals, both overpayments and underpayments will have an interest rate of 8% per year, compounded daily.
Corporations will continue to have a 7% rate on overpayments, with a reduced rate of 5.5% for any amounts exceeding $10,000. Underpayments for corporations will remain at 8% (taxes owed but not fully paid), while large corporateunderpayments will be subject to a higher rate of 10%.
These rates are determined quarterly, based on the federal short-term rate, plus additional points according to taxpayer classification. The current rates were set using the federal short-term rate from July 2024. For the previous three quarters of 2024, interest rates have also remained consistent. Q1 began with a rate of 8% for individual overpayments and underpayments, Q2 maintained the same rates, and Q3 continued the trend, with no changes made throughout the year.
This consistency in interest rates indicates stability in the IRS’s approach, reflecting broader economic conditions and the steady short-term federal rate. For more details, consult Revenue Ruling 2024-18. Tax professionals stay alert for any future changes, as these rates are reviewed every quarter.
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