When the Federal Interest rates go up, the IRS increases the interest they charge for underpaying quarterly taxes.
In 2022, the interest rate for underpayment for independent workers during the 1st quarter of the year was 3%. In 2023, that rate has climbed to as high as 8%
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What This Means for You
If you don't pay your quarterly taxes on time, the end-of-year penalty will be significantly higher. This can reduce your refund (if you have W-2 income and usually get one) or substantially increase your tax bill.
How WorkMade Helps
Your WorkMade account automatically calculates your tax rate and sets money aside for your quarterly tax payments. Keeping up with these payments throughout the year ensures you avoid penalties and have peace of mind when it's time to file your taxes.
📓 Each tax situation is unique. WorkMade provides general info based on guidelines from tax authorities, which may change over time. For more details, refer to Regulation CC.