The Internal Revenue Service (IRS) announced its taxpayers in United States that the interest rates will remain the same for the first quarter of the year 2020. It means that for the calendar quarter beginning January 1, 2020, all taxpayers throughout USA will face the similar interest rates from IRS as that of now. According to the IRS, the interest rates will be as follows:
- 7% interest rate for large corporate underpayments.
- 5% interest rate for other underpayments.
- 5% interest rate for over payments (while 4% interest rates in the case of a corporation).
- 5% interest rate for the portion of a corporate over payment more than $10,000.
If you are still having a confused picture regarding hat are interest rates in USA and how you, as a taxpayer, are exposed to them, you can book an appointment with us for your consultancy.
Interest Rates for 1st Quarter of Year 2020:
- The rate of interest is determined on a quarterly basis under the Internal Revenue Code of USA.
- Specifically in the case of taxpayers other than corporations, the over payment as well as underpayment rate is the federal short-term rate in addition to 3 percentage points.
- In the case of a corporation, the underpayment rate is comprised of the federal short-term rate in addition to 3 percentage points.
- In the case of a corporation, the over payment rate is comprised of the federal short-term rate in addition to 2 percentage points.
- In the case of large corporate, the rate for underpayments is the federal short-term rate in addition to 5 percentage points.
- The interest rate n the portion of a corporate over payment of tax exceeding $10,000 for a taxable period is comprised of the federal short-term rate in addition to one-half (0.5) of a percentage point.
- Must note that these interest rates are calculated from the federal short-term rate determined during October 2019, to be effective from 1st November, 2019, on the basis of daily compounding.
- For our readers guidance, we are attaching Revenue Ruling 2019-28 (PDF) that contains complete details on the rates of interest in the United States for 2020
With the similar interest rates in USA for the first quarter of the year 2020, the IRS also reminded taxpayers about the January 31 deadline for filing wage statements and independent contractor forms. If you need any further assistance, don’t hesitate to request call back with our representative.