By Luis Durani
Interest Rates To Increase For The First Quarter Of 2023
The Internal Revenue Service said today that interest rates will go up for the first quarter of 2023, which starts on January 1.
Overpayments and underpayments for individuals will increase from 6% to 7% per year, compounded daily. New prices:
7% is the rate that applies to overpayments, which are defined as payments that are made in excess of what is owing, while 6% applies to companies.
4.5% for overpayments over $10,000. Underpayments: 7%. (overdue taxes) 9% of large corporations underpaid.
The Internal Revenue Code mandates that the annual percentage rate, or APR, be adjusted every three months.
The overpayment and underpayment rate for taxpayers who are not corporations is the federal short-term rate plus 3 percentage points.
A corporation's underpayment rate is the federal short-term rate + 3 percentage points, and its overpayment rate is the same.
The rate for large corporate underpayments is the federal short-term rate plus five percentage points.
The federal short-term rate plus 0.5 of a percentage point is added to the amount of a corporate tax overpayment that is more than $10,000 for a tax period.
The interest rates that were announced today are based on the short-term rate set by the federal government for October 2022. Look at the revenue ruling to find out more.