Even IRS penalties are affected by inflation. The IRS just announced that fourth quarter 2022 interest rates for tax overpayment and underpayment will increase by 1%. The interest rate for overpayments will be 6% for most taxpayers and 5% for corporations. If a corporation overpays by more than $10,000, the rate will be 3.5%. The underpayment rate for most taxpayers will be 6%, but large corporations will be penalized at 8%. Most interest is determined quarterly and is based on the federal short-term rate, plus three percentage points (an extra two percentage points for corporate overpayment or half a percentage point for corporate overpayment exceeding $10,000). Contact us with questions about how these interest rates will affect you and your business.© 2022
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