Enter the total tax owed (after subtracting withholding and credits).
When you actually submitted your tax return (or plan to).
The date you made (or plan to make) full payment to the IRS.
Q3 2026 (Jul-Sep) — Federal short-term rate + 3%. Compounds daily.
Fill in the unpaid tax amount and the relevant dates on the left. Your estimated IRS penalties and interest will appear here.
When you file your federal income tax return late or pay your taxes after the due date, the IRS charges penalties and interest on the unpaid balance. The two main IRS fines are the failure-to-file penalty and the failure-to-pay penalty. Understanding how to calculate tax penalties and interest can help you take steps to reduce your total amount owed.
The penalty for filing taxes late (also called the IRS failure-to-file penalty) is 5% of your unpaid taxes for each month (or partial month) the return is late. This IRS fine for late filing maxes out at 25% of the unpaid tax after 5 months.
If your return is more than 60 days late, the minimum penalty is the lesser of $510 (for 2026 tax returns) or 100% of the tax you owe. Filing a valid Form 4868 extension gives you until October 15 to file without this penalty, but it does not extend the payment deadline.
The IRS late payment penalty (failure-to-pay penalty) is 0.5% of the unpaid tax per month (or partial month) after the due date. This late tax payment penalty also maxes out at 25%. If you set up an approved IRS installment agreement, the rate drops to 0.25% per month.
If you owe both the IRS late filing penalty and the late payment penalty for the same month, the IRS reduces the filing fine by the amount of the payment penalty. This means the combined IRS fines and penalties total 5% per month (not 5.5%) for the first 5 months. After 5 months, the filing penalty reaches its 25% maximum, and only the 0.5% late payment penalty continues to accrue.
Interest on taxes owed is charged on both the unpaid tax balance and any accumulated penalties. The IRS interest rate for 2026 equals the federal short-term rate plus 3 percentage points, compounded daily. For Q3 2026, the current IRS interest rate is 8% per year.
To calculate interest on your IRS balance due, multiply the unpaid balance by the daily rate (8% ÷ 365 = 0.0219% per day) for each day the tax remains unpaid. Unlike penalties, interest cannot be waived or abated except in very rare circumstances involving IRS errors. The only way to stop interest from accruing is to pay the balance in full.
The IRS offers three main paths to penalty relief:
A CP14 notice is the first letter the IRS sends when you have an unpaid tax balance. It shows the amount owed, any penalties and interest charged, and a payment deadline. If you receive a CP14 notice, verify the balance by checking your IRS online account transcript. Pay by the deadline or contact the IRS to set up a payment plan to prevent additional penalties.
If you are self-employed, a freelancer, or have income without withholding, you are generally required to make quarterly estimated tax payments using IRS Form 1040-ES. If you underpay, the IRS may assess a tax underpayment penalty under IRC Section 6654.
You can avoid the IRS underpayment penalty by meeting one of two safe harbor rules: (1) pay at least 90% of the current year's tax, or (2) pay at least 100% of the prior year's tax (110% if your AGI exceeded $150,000). The penalty does not apply if you owe less than $1,000 after subtracting withholding and credits.
Beyond the failure-to-file and failure-to-pay penalties covered above, the IRS imposes additional federal tax penalties in specific circumstances:
Federal income tax penalties can add up quickly. Filing your return on time and paying as much as possible by the deadline are the two most effective ways to minimize IRS fines and penalties.
Disclaimer: This calculator provides estimates based on publicly available IRS penalty and interest rate schedules. Actual IRS assessments may differ due to partial payments, penalty abatements, rate changes between quarters, or other factors. This is not tax advice. For complex situations, consult a licensed CPA, Enrolled Agent, or tax attorney.
Answers to the most common questions about IRS failure-to-file penalties, failure-to-pay penalties, daily compound interest, Form 2210 underpayment, and First-Time Penalty Abatement relief.