The interest rates on overpayments and underpayments are increasing by 1% for the second quarter of 2018, which runs from through April 1, 2018 through June 30, 2018 (Rev Rul. 2018-07). The rates are:
• Noncorporate overpayments and underpayments: 5%
• Corporate underpayments: 5% generally but 7% for large corporate underpayments
• Corporate overpayments: 4% generally but 2.5% for corporate overpayments exceeding $10,000
Although the new 5% rate is generally used to figure an individual’s penalty for underpaying estimated tax for the second quarter of 2018, the rate used to figure the penalty on estimated tax underpayments for the first 15 days of April is the 4% rate that applied for the first quarter.
This is the first increase in IRS interest rates since April 1, 2016. However, the Federal Reserve has hinted that it may raise its rates four times in 2018, which could result in increases in IRS interest rates in subsequent quarters.
Source : JK Lasser Posts >> Tax News