IRS interest rate hike from January 1st

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The IRS is increasing interest rates for underpayments and overpayments for the first quarter of 2023 through January 1.

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The rate withheld by individuals on outstanding taxes not paid in full will increase from 6% per annum to 7% per annum in the third quarter.

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The interest rate for overpayment by corporations will be 6%.

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The rate will be 4.5% for any corporate payment over $10,000.

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Whereas for large corporate underpayment, the interest rate will be 9%.

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The IRS sets its interest rates on a quarterly basis under the Internal Revenue Code and rates for individuals at the federal short-term rate, plus three percentage points.

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Underpayment rates for corporations are the same as for individuals, while overpayment rates for companies exceed the federal short-term rates.

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IRS interest rate hike from January 1st

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