Last week, the IRS stated that interest rates for the fourth quarter will remain unchanged. Interest rates are decided on a quarterly basis and they vary depending upon whether there is an underpayment or overpayment of taxes and whether it is a corporation or not. Interest compounds daily and rates are built off of the Federal short-term interest rate.
For the period of October 1st to December 31st, 2010, interest rates are as follows:
For non-corporate, the interest rate is equal to 4% for underpayments and overpayments.
For corporations, any underpayment over $10k will carry a 6% interest rate otherwise it will be 4%. Any overpayment that exceeds $10, will carry a 1.5% interest rate, otherwise, it will be 3%.
If you haven’t filed a tax return, having an unfiled tax return will only lead to more problems and consequences.