As we navigate through the tax year, we want to ensure you are well-informed and prepared for upcoming changes and deadlines.
Upcoming Deadline Alert:
The due date for your 3rd quarter estimated tax payment is right around the corner – September 15, 2023. It is crucial to accurately calculate and submit your payment on time to avoid unnecessary penalties and interest charges.
Important Update on IRS Interest Rates:
The IRS has announced an increase in interest rates for tax overpayments and underpayments, effective from the fourth quarter of 2023 (starting October 1, 2023), as per Revenue Ruling 2023-17.
For non-corporate taxpayers (individuals, trust, etc.):
Both underpayments and overpayments rate will be 8%. This 8% rate will also apply to estimated tax underpayments for the fourth quarter of 2023. This rate increased 1% each quarter in 2022, starting at 3% and going to 6%. The last increase was the first quarter of 2023 to 7%.
For corporations:
The overpayment rate will be 7%, but a 5.5% rate will apply to overpayments exceeding $10,000. The underpayment rate will be 8%, except for large corporate underpayments, which will be 10%.
Why is this Important?
With the increase in interest rates, underpaying your estimated tax can lead to a significantly larger tax bill at the end of the year. Additionally, you may incur penalties and interest on the underpaid amount.
We are here to help!
Calculating estimated taxes can be challenging, but we are here to assist you. If you need help determining your estimated tax payment for the third quarter or have any questions regarding the increase in IRS interest rates, please do not hesitate to reach out. Our team of tax professionals is ready and eager to assist you.
Remember, staying proactive with your tax payments not only helps avoid unnecessary fines but also keeps you in good standing with the IRS.
Thank you for your attention to this critical matter. We appreciate your continued trust in theKFORDgroup and our services.