On October 1, IRS interest rates increase to 6%. What compensation will you receive for a lost refund?
While the IRS works to reduce its backlog, millions of Americans still have tax returns that are pending.
But there’s a little good news if you’re missing a refund: You may be earning interest on your unpaid balance,
the rate jumps to 6% from 5% on Oct. 1, according to the agency.
Typically, the IRS has 45 days to process your tax return and issue a refund before interest starts to accrue.
Interest adjusts every quarter based on the federal short-term rate.
However, Tommy Lucas, a financial advisor at Moisand Fitzgerald Tamayo, cautioned, "It's taxable, so be prepared to report it."
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What compensation will you receive for a lost IRS refund?