What is the interest rate on payments late for FEDERAL TAX?

Fishhead · 03-12-10, 09:18 AM

For instance, say one owes 10,000 come APRIL 15th and cannot pay his or her tax and takes up a payment plan with the IRS............what interest do they pay(and penalties, if any)?

SBR_John · 03-12-10, 09:46 AM

I think its 12%. The penalty will depend on a few factors but figure on 10%. Better to come up with money than get wrapped around the axle of the IRS.

Reload · 03-12-10, 10:15 AM

I am concerned you'd bring this up, Fish. Only someone really barreled in should be asking things like this

MartinBlank · 03-12-10, 10:29 AM

Actually John, I am pretty sure it is the Federeal Short Term Interest rate plus 3% points.

If it is for the most recent tax year, that would be 4%.

If it is for an older year, the rate is retroactive to the STIR for that specific tax year.

I am 99.444% sure on this one.

Rollins08 · 03-12-10, 10:30 AM

Make sure you file either way even if you can't pay. Also they will work out installments if you can't pay all at once.

Domer · 03-12-10, 10:32 AM

you pay a penalty + the interest rate (which is usually low, like 3-5%). and if you are under-paying by 10 grand, you should have been making estimated tax payments and will owe interest on that sum as well.

why don't you call your accountant

or get one

mmike032 · 03-12-10, 10:33 AM

just call one of the late night tax relief commercials,
they will get your debt cleared for pennies on the dollar

Fishhead · 03-12-10, 10:35 AM

Originally posted by Domer

you pay a penalty + the interest rate (which is usually low, like 3-5%). and if you are under-paying by 10 grand, you should have been making estimated tax payments and will owe interest on that sum as well.

why don't you call your accountant

or get one

I was just curious is all.............