The Internal Revenue Service reports interest rates will remain the same for the calendar quarter beginning Oct. 1, 2021. The rates will be:
- 3% for overpayments (2% in the case of a corporation);
- 0.5 % for the portion of a corporate overpayment exceeding $10,000;
- 3% percent for underpayments; and
- 5% percent for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined quarterly. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points, according to a news release.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
How the Rates are Computed
The interest rates recently announced are computed from the federal short-term rate determined during July 2021 to take effect Aug. 1, 2021, based on daily compounding.
Revenue Ruling 2021-17, announcing the rates of interest, will appear in Internal Revenue Bulletin 2021-37, dated September 13, 2021.
More Important Information
Here’s how taxpayers can rebuild records after a natural disaster, according to the IRS.
After a natural disaster, taxpayers need records to help them prove and recover disaster-related losses. This may be for tax purposes, getting support from federal assistance programs, or for insurance claims.
While personal or business property may have been destroyed, all hope is not lost. Here are some steps that can help people reconstruct important records.
- Get free tax return transcripts immediately using Get Transcript on IRS.gov.
- Order transcripts by calling 800-908-9946 and following the prompts.
People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements.
- To get documents related to property, homeowners can contact the title company, escrow company, or bank that handled the purchase of their home or other property.
- Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
- For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
- When no other records are available, people should check the county assessor’s office for old records that might address the value of the property.
- Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association, and Edmunds.