8% Doesn't seem that bad in comparison to a sharp stick in the eye.
The IRS in its never en ding devotion to serving the American People has in its unilateral wisdom raised the interest charged on late estimated tax payments to 8%.
Read an article about it here:
https://www.breitbart.com/economy/2023/12/03/irs-increases-penalty-tax-underpayments-eight-percent/
Many of my clients must make ES Payments for both the Fed and State(s). They recognize that these ES payments are mandated and their only choice is to pay later when necessary and now pay 8% on top of it. Some choice when the hidden Inflation Tax is killing them softly. Don't kid yourself, the Inflation Tax is not over. It will bound back in 2024 after a false breakdown. When all things are considered including the Trump Tax Breaks sunsetting soon, the future holds higher taxes and less value for the mighty Dollar. If you have yet to notice Inflation eroding your purchasing power, I suggest a visit to Eye Express.
I recently raised my monthly fee to keep pace. I wrestled with it because I did not want to be a further burden to already struggling clients. However, I am adding value to my services in order to keep the exchange in sync and many of my attempts will focus on helping clients stay apace too. Austerity for some, increased menu procing for others and both for a few. That is the insidious nature of eat or be eaten which Inflations fosters.
For those not yet organized as an S Corp, consider timing it for Jan 1 2024 and gain much improved control over taxation. S Corp profits pass through to its Shareholders and those pass through profits are not subject to the SE Tax which is currently 15.3%, Sch C filers pay it. Sub S filers don't. Once again, understanding the IRC can bring some relief but the entity structure must be correct.
If you need help restructuring into an S Corp, I handle it all at a very low flat rate when you are a monthly client. My goal as a Tax Accountant is that my clients pay the least amount of tax (all kinds) legally possible. Call or email for help but now is best because tax season keeps me pretty busy.
Best,
Donn Marier
DM-Your Own CFO