2024 Interest on Underpayment of Estimated Tax by Individuals, Estates, and Trusts-2025

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WASHINGTON The Internal Revenue Service today announced interest rates will remain the same for the calendar quarter beginning April 1, 2024. For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.
Examples of valid reasons for failing to file or pay on time may include: Fires, natural disasters or civil disturbances. Inability to get records. Death, serious illness or unavoidable absence of the taxpayer or immediate family.
If you didnt pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.
Capital gains and qualified dividends. For tax year 2024, the 20% maximum capital gains rate applies to estates and trusts with income above $15,450. The 0% and 15% rates apply to certain threshold amounts. The 0% rate applies to amounts up to $3,150. The 15% rate applies to amounts over $3,150 and up to $15,450.
The IRS will not charge you an underpayment penalty if: You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or. You owe less than $1,000 in tax after subtracting withholdings and credits.

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The IRS announced interest rates will remain the same for the calendar quarter beginning April 1, 2025. For individuals, the rate for overpayments and underpayments will be 7% per year, compounded daily.
Accuracy-Related Penalty Section 6662 Rather, the IRS imposes a 20% accuracy-related penalty for any of the following: Negligence or disregard of rules or regulations (most common) Substantial understatement of income tax (most common) Substantial valuation misstatement.

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