The interest rates on overpayments and underpayments are unchanged from the fourth quarter of 2020 (Rev Rul. 2020-28). The rates are:
The 3% rate is used to figure estimated tax penalties for individuals for the first quarter of 2021 and also the first 15 days of April.
Gross income less allowable adjustments, such as IRA, alimony, and Keogh deductions. AGI determines whether various tax benefits are phased out, such as personal exemptions, itemized deductions, and the rental loss allowance and modified adjusted gross income (MAGI).