Penalty estimator
Enter the tax you owe and how many months late you are.
Falling behind on a tax filing is stressful, but the cost depends heavily on which deadline you miss. The estimator above gives you a rough number; here is what is actually driving it and how to bring it down.
Failure-to-file vs failure-to-pay — the difference that matters most
- The failure-to-file penalty is 5% of the unpaid tax per month, capped at 25%.
- The failure-to-pay penalty is only 0.5% per month, also capped at 25%.
- When both apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay amount, so they do not simply stack at the full rate.
- On top of penalties, the IRS charges interest on both the tax and the penalties until everything is paid.
Because failing to file is ten times more expensive per month than failing to pay, the single best move when you are behind is to file on time even if you cannot pay.
How interest is added
Interest accrues daily on your unpaid balance, including on the penalties themselves. The rate is set quarterly and tends to track short-term market rates.
This is why a balance left unpaid for a year costs noticeably more than the headline penalty alone — the interest compounds on a growing base.
How to get penalties reduced or removed
- First-time penalty abatement can remove penalties entirely if you have a clean compliance history for the prior three years.
- Reasonable-cause relief is available when a genuine hardship — illness, natural disaster, or records loss — prevented timely filing or payment.
- A CPA or EA can request abatement and set up an installment agreement so the balance stops growing.
Related tools & guides
Keep going: Quarterly Tax Estimator · Estimated quarterly taxes guide · US tax filing service.
Frequently asked questions
What is the penalty for filing taxes late?
The failure-to-file penalty is 5% of unpaid tax per month, up to a maximum of 25%. It is much larger than the failure-to-pay penalty, so filing on time matters even if you can't pay.
What if I file on time but can't pay?
You'll owe the smaller failure-to-pay penalty of 0.5% per month plus interest, but you avoid the 5%-per-month failure-to-file penalty entirely.
Does interest accrue on top of penalties?
Yes. The IRS charges interest on both the unpaid tax and the penalties until everything is paid in full.
Can IRS penalties be removed?
Often yes — through first-time penalty abatement if you have a clean recent history, or reasonable-cause relief for genuine hardships.
Behind on a filing?
Get current, request penalty relief and set up a payment plan with a CPA & EA team.
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