The Internal Revenue Service announced about a month ago on May 20, 2022, that interest rates will be increasing for the calendar quarter beginning July 1, 2022, which is coming around the corner rather soon here, for overpayments and underpayments of quarterly taxes.
IRS Reveals New Increased Interest Rates
The new rates will be:
5% for overpayments
4% in the case of a corporation
2.5% for the portion of a corporate overpayment exceeding $10,000.
5% for underpayments.
7% for large corporate underpayments.
How Interest Rates Affect Individuals/Businesses
These changes generally apply to businesses, 1099 independent contractors, and self-employed individuals who must make quarterly anticipated tax payments. Interest rates are calculated on a quarterly basis based on the federal short-term rate.
The law requires taxpayers to pay a specific percentage of their taxes each quarter except for W-2 employees who have payroll taxes automatically withdrawn from their paychecks. However, independent contractors are liable for paying their fair amount of taxes throughout the year annually.
If sole proprietors, partners in a business, or a business owner who files as an S-Corporation anticipates having a tax liability of at least $1,000 in April, they are required to pay quarterly taxes. As for C-Corporations, the amount would be $500.
Resolve Your Tax Bills
If you’ve found yourself in a nasty mess with the IRS, take a deep breath. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there’s a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.