IRS Interest RatesLast week, the IRS stated that interest rates for the fourth quarter will remain unchanged. Interest rates are decided on a quarterly basis and they vary depending upon whether there is an underpayment or overpayment of taxes and whether it is a corporation or not. Interest compounds daily and rates are built off of the Federal short-term interest rate.

For the period of October 1st to December 31st, 2010, interest rates are as follows:

Non-Corporate:

For non-corporate, the interest rate is equal to 4% for under-payments and over-payments.

Corporate:

For corporations, any underpayment over $10k will carry a 6% interest rate otherwise it will be 4%. Any overpayment that exceeds $10, will carry a 1.5% interest rate, otherwise it will be 3%.

If you haven’t file a tax return, having an unfiled tax return will only lead to more problems and consequences.