The IRS has announced that the interest rates applicable to overpayments and underpayments of federal taxes are much lower in the third quarter of 2020 compared with the rates in the second quarter of the year (Rev. Rul. 2020-13). The rates are:
Note: The IRS also announced the blended rate for 2020, which is used to figure imputed interest on below market demand loans outstanding for the entire year (Rev. Rul. 2020-14). The blended rate is 0.89% (in contrast to last year’s rate of 2.42%).
This is generally adjusted gross income increased by certain items such as tax-free foreign earned income. MAGI usually is used to determine phaseouts of certain deductions and credits.