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IRS Maintains Status Quo on Interest Rates in Q4
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Subscribe28 AUG 2024 / IRS UPDATES
The Internal Revenue Service (IRS) has declared that interest rates will remain unchanged for the Q4 of 2024, with individuals and corporations subjected to an interest rate of 8% for overpayments and underpayments while large corporations experience a higher rate of 10%. The stability in these interest rates reflects broader economic conditions and demonstrates the IRS's steady approach towards taxation, making them an important focus for tax professionals.
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 corporate underpayments 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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