On November 18th, the Internal Revenue Service announced that interest rates will decrease for the calendar quarter beginning January 1, 2025.
The rates will be:
• Seven (7) percent for individual overpayments (refunds)
• Seven (7) percent for individual underpayments (balance due)
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For Taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. The interest rates announced today are computed from the federal short-term rate determined during October 2024.
Shai said:
I’m going to overpay by $200,000 and swim in my 7% no-risk interest rate.
On November 18th, the Internal Revenue Service announced that interest rates will decrease for the calendar quarter beginning January 1, 2025.
The rates will be:
• Seven (7) percent for individual overpayments (refunds)
• Seven (7) percent for individual underpayments (balance due)
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For Taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. The interest rates announced today are computed from the federal short-term rate determined during October 2024.
Shai said:
I’m going to overpay by $200,000 and swim in my 7% no-risk interest rate.
IRS pays credit interest on refunds when, through no fault of the Taxpayer, the payment is delayed more than 45 days from the later of the return due date or the return received date.
For example, you file a complete and correct return on February 1st. No credit interest would be paid with the refund until May 30th.
Yan said: @Brady
Hmm is that right? I did an amended for someone that missed taking some credits and they got a few hundred in interest. I could be wrong.
A few years ago the IRS was commonly taking up to a year to process amended returns, so a $4000 refund could easily generate a few hundred in interest.
But if the IRS had that money for 2 years before the amended return was filed, that’s a yield of around 2 1/2%, nothing spectacular.
Shai said:
I’m going to overpay by $200,000 and swim in my 7% no-risk interest rate.
I just had a client who accidently paid his 1st qtr 2024 estimate using a 2021 estimate voucher. It was applied to 2021. The irs refunded the payment 5 months later plus interest.
Whit said:
Long overdue…but…Everyone should pay a flat tax every year except for billionaires and the rest is history.
Worst. Idea. Ever.
I love when people say these things in r/Tax because there are plenty of people who call them out. When people say things like this in literally any other subreddit, everybody agrees because no one understands anything about taxes lol
@Dani
I like checking generic information posts like this on this sub (as opposed to people asking for help), and seeing if the first comment is someone saying to abolish the IRS…with weird use of ellipses…and a hundred downvotes. Because it always is.
Whit said:
Long overdue…but…Everyone should pay a flat tax every year except for billionaires and the rest is history.
Not gonna happen. Ppl who earns less always want ppl who earns more to pay more tax and higher tax rate, regardless if you are billionaire or millionaire or poor. Even if you don’t earn to much there are still ppl earn less and want you to pay more and higher tax rate than them.
Also, Us federal taxation mainly taxes on income not assets, billionaire is a term to value assets not income. You cannot really tax a billionaire who has zero income