Understanding the Basics of IRS Interest Rates
If you don’t pay your taxes when they’re due, you may be charged interest on that unpaid balance. The amount will depend on current interest rates and how long the money has been overdue. You want to do everything you can to pay your taxes when they are due so you can avoid being charged interest, which can add up over time.
The IRS takes the short-term federal rated and adds an additional 3%. Then, the final figure is rounded to the nearest percentage point. This rate is the same for all individual taxpayers.
If you underpay the amount that is required on your estimated taxes, or if you pay it late, you may be charged a Failure to Pay Penalty (which is 0.5% for every month) However, it can be waived if you give the IRS a good reason for paying less, but you will still have to pay interest.
When the IRS Will Pay You Interest
The IRS won’t pay interest for any excess money that has been withheld, or if you have paid too much in estimated tax. However, they will pay interest if they take longer than 45 days from your filing date to send you a refund. Bear in mind that, even though the deadline is April 15, the 45-day period starts from the day you filed. So, that should be taken into account if you’re late in sending your return.
You can also receive interest from the IRS if you have been over-assessed on your income taxes or if they amend your tax return.
Managing Due Dates
The IRS has due dates in place for every type of payment and for every kind of taxpayer. The same is true for payments that go to Social Security and Medicare. You need to keep an eye on them to avoid paying any interest or penalties, which can add up over time.
If you’re required to make quarterly payments, make sure you know how much you have to pay and when. Otherwise, you can be assessed a penalty (in addition to any interest that can incur in the time that it’s past due). Most importantly, you have to know what you need to pay and when.
Finding a Tax Professional
Tax laws can be hard to understand, and keeping track of due dates can be just as challenging. So, it’s possible that an upcoming payment can fall through the cracks. That’s why it pays to have a tax professional to help you keep track of what you have to pay and when.
However, you will find that tax professionals will have different areas of expertise, which is why it’s important to find the right one. Tax accountants will be able to help you file your tax return, but they won’t be able to help you if a legal issue should arise.
Some tax attorneys also work as tax preparers, but not always. They will, however, be able to represent you in a Court of Law, so they will be better suited for this type of situation. It’s still important to find the right one, because they all have different levels of specialization. Make sure you ask them detailed questions about their experience, and find out if they have worked on cases like yours.
While you’re looking for a tax attorney, it’s important to do your due diligence. That way you don’t waste a great deal of time and money on someone who isn’t doing the job right. It’s also important to shop around, as it will save you a great deal of stress later on.
Tax Law Tampa has a team of expert tax attorneys who can help you stay in compliance with current tax regulations, which can change from year to year. We can also help you manage your payments, as well as any due dates that are attached to them. This will keep you from paying any interest or penalties.
We can also help you in case there is a legal issue. We will be able represent you in any type of tax-related case, and we will come up with a workable solution to your specific situation. These kind of problems should not be ignored, which is why you can’t afford to wait.
If you want to find out more about how we can help you, get in touch with us today!