I am looking for an on-line calculator that would be able to figure out the interest accrued on an overpayment of taxes.
What I have found on-line only applies to underpayments, which is when a taxpayer has not paid their correct tax liability. The IRS has penalties and interest for this calculation.
However, in the case of an overpayment, as far as I can tell, there is no penalty paid by the IRS to the taxpayer. However, they WILL pay interest on the money overpaid.
Interest is compounded daily, and the interest rate changes quarterly.
I was hoping to find a calculator that would allow the insertion of the overpayment, the date of the original payment, the date of the new filing, and find the interest accrued over the designated time period.
My google-fu has only found expensive software packages, which I don’t really want.
If you’re entitled to a refund, why delay requesting it? File your paperwork and when it’s processed, you’ll learn if you’re situation will earn interest and if so how much.
Interest calculations can get bulky and can require manual intervention in complicated situations, but if yours is just a straight refund from a return or amended return filing, the calcs are done automatically and are reliably correct.
Interest does not accrue until six weeks after you have filed your return or six weeks after it is due. If you file your 2012 taxes today and are due a ten thousand dollar refund, you won’t earn any interest if they get you your money within 42 days. (Note: even though the return, in this case, is more than two years late, there is no penalty for late filing because no tax is due)
As bizerta said, the interest due from the government only kicks in when they are late in processing your refund, which is triggered off when you file your taxes.
The government doesn’t pay you interest, just because you happen to overpay them.
Interest will be calculated for an amended return if that’s what the OP is talking about.
Are you familiar with Excel? If you know functions, it’s pretty easy to calculate the number of days between two dates and then apply the the daily interest calculations for each quarterly period.
This is GQ, so as much as I appreciate everyone’s opinions, I am not looking for advice here. I am looking for a calculator.
Here’s what I need (and cannot find on-line)…
The ability to put in the amount of overpayment. ($X dollars)
The date the overpayment was made
The date the filing of the amended return is being filed.
With those veriables, I am hoping the on-line calculator will work out the interest on the $X dollars over the number of days the interest has accrued, and take into account any changes in the interest rate the IRS uses to make this calculation.
Yes, I can grind this out by hand, but I was hoping something was available on-line that would give me the answer quickly.
Here’s a quick-and-dirty calculator: Overpayment times months divided by 400. where “months” is the number of months between the return’s due date and the amended filing. Example: if your overpayment is $1680 for your 2013 return filed 15 months ago, then $1680 * 15 / 400 = $63 (which is taxable on your 2015 return).