IRS decides on 1st quarter interest rates
Posted on 21. Feb, 2011
Tax collections are very complicated and at times to determine what would be the actual tax liability would be a taunting task in itself. Many tax payers are not able to determine correctly what is due to be paid to the tax authorities and end up wither paying more or less to them. This makes the task of IRS officials even more complex as they have to make accounts of excess or deficit of income tax collected on part of every taxpayer. If they have collected less than due tax, they would need to follow up and collect the balance due (of course with interest and penalties) and when if have got more they would also have to return the excess back to the taxpayer.
Under the internal revenue code there is provision of charging and paying interest on deficit and excess payments respectively. The interest rates for the same are announced quarterly by IRS in advance. The applicable interest rates for the Ist quarter of the current year were recently announced by IRS. These rates are as following:
- Will pay @ 3% (three percent) to individuals and 2% (two percent) to corporate taxpayers from whom excess payments have been received.
- Will Charge @ 3% (three percent) from individuals and 5% (five percent) from corporate taxpayers who have underpaid their taxes.
- Will pay @ 0.5% (Zero point five percent) to corporate who have overpaid $10,000 or more to IRS.
The rates for the second quarter are expected to be published on 1st of April.
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