IRS penalty and interest calculator

A taxpayer who owed $12,000 on a return due April 15, filed it July 10 and pays on September 21 owes $14,372.47: $1,620 of filing penalty, $360 of payment penalty and $392.47 of interest. That is 19.8% on top of the tax. The same balance, with the return filed on time and paid on the same day, costs $12,705.79. The late return, not the late payment, is the expensive part.

The calculator works out the failure-to-file and failure-to-pay penalties month by month from the dates you enter, adds interest at the IRS quarterly rate compounded daily, applies payments you have already made, and shows what the same tax would cost filed on time and with the penalties removed. The rates run through the fourth quarter of 2026.

Who reaches for this

You enter the tax you owed on the original due date, the date the return was or will be filed, any payments and the date you will pay the rest. The calculator counts the months in each penalty, applies the rate to the unpaid tax at the start of each month, and applies the caps and the minimum. It then compounds interest day by day, using the rate for each quarter, on the tax and on the filing penalty.

The result is an estimate of the amount due on the payoff date, and it separates the parts you can influence from the parts you cannot. Filing sooner, paying sooner, joining a payment plan and asking for relief each change one line. If you underpaid during the year and want the estimated tax penalty, use the quarterly estimated tax calculator. This page starts after the year has ended.

The IRS charges two separate penalties for a late return, and they work differently.

Two features of the filing penalty matter most. It is ten times the payment penalty, and it caps after five months, so a return that is more than five months late has already used up its filing penalty, at 22.5% of the tax in the usual case where the payment penalty also runs, after which only the smaller payment penalty and interest continue. And it applies only to tax you have not paid: it is calculated on the unpaid tax, after withholding, estimated payments and credits. A refund return that is filed late has no penalty, because there is nothing unpaid.

The payment penalty runs for as long as any tax remains unpaid, up to 50 months. It is small in any one month, and the cap of 25% is reached only after more than four years. It rises to 1% a month if you do not pay within 10 days after receiving a notice of intent to levy, and it falls to 0.25% a month during an approved installment agreement if you filed your return on time.

Each penalty is charged for every month or part of a month. There is no proration. A return due April 15 and filed on April 16 is one day late and one full month late. The months run from the due date, not from the calendar: the first ends May 15, the second June 15, and so on.

In the example, the return was due April 15 and filed on July 10. July 10 is in the third month, which started on June 15, so the filing penalty applies for three months. Each month it is 4.5%, since the payment penalty also runs, so it is 3 × 4.5% × $12,000 = $1,620. The payment penalty runs to the payoff date of September 21. Months begin on April 15, May 15, June 15, July 15, August 15 and September 15, six in all, so it is 6 × 0.5% × $12,000 = $360.

The part-month rule works in both directions. A return filed on May 15 has one month of penalty and one filed on May 16 has two, so a day can cost 4.5% of the tax. Check the monthly anniversary of the due date before choosing a filing or payment date.

Interest is separate from the penalties and is not waived when they are. For individuals it is the federal short-term rate plus 3 percentage points, set each quarter. The IRS announced on August 21, 2026 that the rate would stay at 7% for the fourth quarter, based on a 4% federal short-term rate measured in July. It applies to underpayments and overpayments alike, and it is compounded daily.

Interest accrues from the original due date until the tax is paid, whether or not you filed an extension. The daily rate is the annual rate divided by 365, applied to a balance that includes the interest already added, so it compounds. At 7% a year, daily compounding is about 7.25% over twelve months. On $12,000 unpaid from April 15 to September 21, the rate was 6% until June 30 and 7% after, and the interest on the tax is $345.79.

Interest also runs on the failure-to-file penalty, from the return’s due date, including extensions. In the example that adds $46.68. Interest on the payment penalty generally runs only after the IRS sends a notice and demand and you do not pay within a short period, so the calculator does not charge it. The tax, penalty and interest together are what a payoff quote from the IRS would show.

A single taxpayer owes $12,000 for 2025, due April 15, 2026. No extension, no payments. The return is filed on July 10, and the balance will be paid on September 21.

The extra cost is $2,372.47, or 19.8% of the tax, of which $1,980 is penalty and $392.47 is interest. The return was more than 60 days late, so the minimum penalty applies, but the regular calculation of $1,620 is higher than the $525 minimum, so it does not bind. If the taxpayer had not filed at all by September 21, the filing penalty would have run for five months and reached $2,700, and the total would be $15,483.59.

Where a partial payment goes

A payment before the payoff date lowers the base for every later month. Suppose the taxpayer pays $5,000 on July 10, the day the return is filed. The filing penalty is unchanged at $1,620, because the payment came after the first three monthly anniversaries. The payment penalty falls from $360 to $285, since July, August and September are calculated on $7,000, and interest falls from $392.47 to $321.99. The balance on September 21 is $9,226.99, which is the $14,372.47 less the $5,000 paid and $145.48 of penalty and interest that never accrued.

The IRS applies payments to tax first, then penalties, then interest, and you can usually designate the tax year when you pay. Interest keeps accruing on whatever is unpaid, so paying part now is better than waiting to pay all of it later.

Several unfiled years

Each unfiled year has its own penalties and its own interest, so a taxpayer with two or three missing returns should run each year separately and add the results. The IRS generally expects the most recent six years of returns to be filed before it will resolve a collection problem, and unfiled years are the first thing a payment plan or an abatement request is checked against. Filing the oldest returns is usually the hardest step and the one that makes the rest possible.

The same $12,000 gives very different totals depending on which deadline is missed.

Filing on time and paying late costs $705.79 more than the tax. Filing three months late costs $2,372.47 more, more than three times as much. The rule of thumb that follows is the one the IRS repeats: file on time even if you cannot pay. Filing stops the biggest penalty. Paying stops the small one and the interest.

A year late

If the return is filed and paid a full year late, on April 15, 2027, the filing penalty is $2,700, using five months at 4.5%, the payment penalty is $720 for twelve months, and interest is $1,032.98. The total is $16,452.98, or 37% over the tax. Time makes the payment penalty and interest grow, and the filing penalty stops after five months.

An extension moves the filing date, not the payment date

An extension of time to file, usually six months to October 15, removes the failure-to-file penalty for a return filed by then. It does not extend the time to pay. The tax is still due on April 15, the payment penalty starts the day after, and interest runs from that date. A taxpayer who files an extension and pays the $12,000 on October 10 owes $360 of payment penalty and $390.85 of interest, or $12,750.85 in all. An extension is worth having whenever you might not finish on time, and a payment with it, of the best estimate of the tax, is worth making.

Installment agreements

An approved installment agreement lowers the payment penalty from 0.5% to 0.25% a month, if the return was filed on time. It also stops most collection action while you pay. If the example taxpayer had filed on time and had an agreement from June 1, paying off the balance on April 15, 2027, the payment penalty would be $420 instead of $720. Interest is not reduced, and the IRS charges a fee to set up the agreement. A plan is a way to get through a difficult year at a reasonable price, not a way to avoid the cost of borrowing from the government.

Partial payments help too. A payment reduces the unpaid tax that the penalties and interest are calculated on for later months. Enter payments you have made, with dates, and the calculator applies them to the tax first.

A return that is more than 60 days late has a minimum failure-to-file penalty: the lesser of a dollar amount that is adjusted for inflation each year or 100% of the tax owed. The amount is $525 for returns due in 2026, $510 for those due in 2025 and $485 for those due in 2024. The dollar figure depends on the year the return was due, so an older return has a different minimum.

The minimum bites hardest on small balances. On a $300 balance filed 86 days late, the regular calculation is three months of 4.5%, which is $40.50, but the minimum is the lesser of $525 or $300, so the penalty is $300, the whole tax. Filing within 60 days avoids the minimum. A taxpayer with a small balance who is close to the 60th day has a clear reason to file now.

For a return due April 15, 2026, the 60th day is June 14, so a return filed on June 14 is not more than 60 days late and the minimum does not apply, while one filed on June 15 is and does. With an extension to October 15, the count starts from the extended date. The dates are worth writing down, because the difference between them can be the whole balance on a small return.

Penalties, unlike interest, can be removed. Two routes are common.

Relief removes penalties and generally the interest that accrued on them. It does not remove interest on the tax. In the example, abating both penalties leaves $12,345.79 to pay against $14,372.47, a saving of $2,026.68. Interest on the tax, $345.79, remains.

Ask before assuming. You can request abatement by phone for a first-time waiver, or in writing, and the IRS often grants it to eligible taxpayers. Pay the tax first if you can, since the request is easier once the balance is settled and interest stops running. The calculator shows both totals so you can see what the request is worth.

Checking the IRS figure

The IRS can show the penalty and interest it has charged on your online account and on an account transcript for each year. Compare them with an estimate. Differences usually come from the date a payment was posted, a return processed later than filed, interest calculated to a different date, or a penalty the calculator does not model. If a number looks wrong, ask what dates and amounts it was based on, since a wrong filing date or a missed payment can overstate the penalty. Errors do happen, and they can be corrected.

Most states have their own late filing and payment penalties and interest, at their own rates. They are not included here, and a balance due on a federal return often comes with a state balance as well.

The two penalties here apply to a late return and a late payment. Others exist, and the calculator does not model them.

An IRS notice may include several of these. The calculator estimates only the late filing and payment penalties and interest on a balance from a filed or unfiled return. If your notice shows other penalties, or amounts that differ from the estimate, compare it with an IRS account transcript and ask a tax professional.

The order matters. Filing first has the largest effect, and it costs nothing. Paying and asking for relief follow. The calculator lets you test each: change the filing date, add a payment or set an agreement date, and read the total.

If the problem is an underpayment during the year, use the quarterly estimated tax calculator, and to estimate the tax itself, use the 1099 tax calculator.