The IRS just announced that interest rates will stay the same for the second quarter of 2025, and while that might sound like bureaucratic fine print, it actually has real-world implications for taxpayers, businesses, and anyone dealing with refunds or unpaid taxes.
So, what does this mean for you? Let’s break it down.
What Are the IRS Interest Rates for Q2 2025?
From April 1, 2025, the IRS interest rates remain as follows:
- 7% for overpayments (if you paid more than you owed and expect a refund).
- 6% for corporate overpayments.
- 4.5% for corporate overpayments exceeding $10,000.
- 7% for underpayments (if you owe taxes and haven’t paid them in full).
- 9% for large corporate underpayments.
How Does This Affect You?
If You’re Expecting a Tax Refund
If you overpaid your taxes, you might be wondering if you’ll get interest on your refund. The IRS pays interest on late refunds, but only if your refund is delayed for more than 45 days after the filing deadline. That interest is based on the 7% overpayment rate, so if you’re in line for a delayed refund, your payout could be slightly higher.
If You Owe Taxes
If you have unpaid taxes, the IRS charges interest at 7% per year, compounded daily. This means the longer you wait to pay, the more you’ll owe over time. Since this rate remains unchanged from the previous quarter, you won’t see an increase in penalties, but if you’ve been delaying payment, now is the time to act before your balance grows even larger.
If You’re a Business Owner
Businesses with tax obligations should pay close attention to these rates. If you’re a corporation that overpays taxes, you’ll earn a 6% return, or just 4.5% if your overpayment is over $10,000. On the other hand, if you underpay corporate taxes, the IRS will charge interest at a rate of 7% or 9% for large underpayments.
Why This Matters
Interest rates impact how much you’ll owe or be refunded, and staying informed means avoiding unnecessary penalties or making the most of delayed payments. While the IRS keeping rates unchanged this quarter brings stability, taxpayers should still plan wisely when managing tax payments and refunds.
If you owe, pay sooner to avoid compounding interest. If you’re due a refund, watch for potential interest earnings if delays occur. Either way, staying informed helps you keep more of your hard-earned money where it belongs, in your pocket.
- Sleep Syncing Is the Wellness Hack That’s Actually Worth Trying - April 22, 2025
- Zendaya’s Fitness Routine Is All About Fun and Function - April 21, 2025
- Happy Easter Sunday 2025: Top 60+ Wishes, Quotes, Messages & Greetings - April 20, 2025
