The interest rates on overpayments and underpayments are unchanged for the first quarter of 2018, which runs through March 31, 2018 (Rev Rul. 2017-25). The rates are:
The 4% rate is used to figure estimated tax penalties for individuals.
These rates have remained constant since April 1, 2016. However, as the Federal Reserve raises rates, it is expected that IRS interest rates will be increased in the future.
In 2007, up to $85,700 of foreign earned income is exempt from tax if a foreign residence or physical presence test is met.