What Is The Current IRS AFR?
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The Internal Revenue Service publishes the Applicable Federal Rate (AFR) monthly. These rates are used when calculating charitable deductions. The IRS has announced its prescribed federal rates for November 2022. Read on for further details.
These rates are determined by the Internal Revenue Service, which surveys hundreds of financial instruments each month. The rates are used for various purposes, including minimum lending rates and tax purposes.
The rates are different for different types of loans and maturities. For example, the short-term rate covers demand loans, and the mid-term rate applies to loans with a term of three years or less. The long-term rate applies to loans with maturities of nine years or longer. The AFR is a good guideline to use when calculating charitable deductions. So What is the current IRS AFR?
Applicable Federal Rate November 2022
The IRS considers market conditions, as well as macroeconomic factors, to determine the applicable federal rate. This rate is published each month by the IRS and made publicly available. Lenders cannot charge higher than the applicable federal rate because they will face tax consequences.
This rate applies to qualified accounts, such as retirement and savings accounts. The highest AFR is for charitable deductions from remainder interests, and the lowest is for lead trusts and life estate reserved agreements. Those who purchase annuities would prefer the lowest AFR, while those who own pooled income funds must use the deemed rate of return in 2022. The followings are the tables showing the short, mid, and long term rates fort he year 2022:
Short Term Rates for 2022
| Month | Annual | Semiann. | Quarterly | Monthly |
| Jan. | 0.44% | 0.44% | 0.44% | 0.44% |
| Feb. | 0.59% | 0.59% | 0.59% | 0.59% |
| March | 0.97% | 0.97% | 0.97% | 0.97% |
| April | 1.26% | 1.26% | 1.26% | 1.26% |
| May | 1.85% | 1.84% | 1.84% | 1.83% |
| June | 2.21% | 2.20% | 2.19% | 2.19% |
| July | 2.37% | 2.36% | 2.35% | 2.35% |
| Aug. | 2.88% | 2.86% | 2.85% | 2.84% |
| Sept. | 3.05% | 3.03% | 3.02% | 3.01% |
| Oct. | 3.40% | 3.37% | 3.36% | 3.35% |
| Nov. | 4.10% | 4.06% | 4.04% | 4.03% |
Mid Term Rates for 2022
| Month | Annual | Semiann. | Quarterly | Monthly |
| Jan. | 1.30% | 1.30% | 1.30% | 1.30% |
| Feb. | 1.40% | 1.40% | 1.40% | 1.40% |
| March | 1.74% | 1.73% | 1.73% | 1.72% |
| April | 1.87% | 1.86% | 1.86% | 1.85% |
| May | 2.51% | 2.49% | 2.48% | 2.48% |
| June | 2.93% | 2.91% | 2.90% | 2.89% |
| July | 2.99% | 2.97% | 2.96% | 2.95% |
| Aug. | 3.15% | 3.13% | 3.12% | 3.11% |
| Sept. | 2.93% | 2.91% | 2.90% | 2.89% |
| Oct. | 3.28% | 3.25% | 3.24% | 3.23% |
| Nov. | 3.97% | 3.93% | 3.91% | 3.90% |
Long Term Rates for 2022
| Month | Annual | Semiann. | Quarterly | Monthly |
| Jan. | 1.82% | 1.81% | 1.81% | 1.80% |
| Feb. | 1.92% | 1.91% | 1.91% | 1.90% |
| March | 2.14% | 2.13% | 2.12% | 2.12% |
| April | 2.25% | 2.24% | 2.23% | 2.23% |
| May | 2.66% | 2.64% | 2.63% | 2.63% |
| June | 3.11% | 3.09% | 3.08% | 3.07% |
| July | 3.22% | 3.19% | 3.18% | 3.17% |
| Aug. | 3.35% | 3.32% | 3.31% | 3.30% |
| Sept. | 3.14% | 3.12% | 3.11% | 3.10% |
| Oct. | 3.43% | 3.40% | 3.39% | 3.38% |
| Nov. | 3.92% | 3.88% | 3.86% | 3.85% |
