Late tax payments will soon cost you less
Good news: IRS just announced some changes that will ultimately result in significantly lower interest charges on any underpayments of income taxes it receives.
The new changes, announced in IRS Revenue Ruling 2011-18, go into effect on Oct. 1, 2011 and affect underpayments in such a way that the payments will accrue less interest than they did before.
IRS sets the interest rate for underpayments on a quarterly basis. This rate consists of the sum of the Federal short-term interest rate plus a fixed percentage amount.
If, however, your firm overpays the Service on your income taxes — the new changes effectively decrease the interest IRS pays you.
For a more detailed explanation of the recent IRS changes, check out this article by Mike Periu.
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