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IRS Penalty & Interest Calculator for late filing and payment.

See what filing or paying late actually costs. Enter the tax owed and how many months late, and compare the penalty with and without a properly filed extension. The difference is usually shocking.

The two penalties, in plain English.

The failure-to-file penalty is 5 percent of unpaid tax per month (reduced to a net 4.5 percent in months when the failure-to-pay penalty also applies), capped at 25 percent. The failure-to-pay penalty is 0.5 percent per month, capped at 25 percent. Interest accrues on top at the federal short-term rate plus 3 percent, compounded daily. A properly filed extension eliminates the large failure-to-file penalty entirely, which is why the two columns above differ so dramatically.

The mistake this tool exists to prevent.

An extension extends the time to file, never the time to pay. Estimate the tax and pay it with the extension request, and both columns go to zero. We wrote the full breakdown, including what to do when you cannot pay, in The April 15 Extension Trap, and the construction-specific deadlines in Georgia Construction Tax Deadlines.

Disclaimer: This calculator provides simplified federal estimates for educational purposes. It approximates the concurrent-penalty reduction, uses an assumed 7.5 percent annual interest rate (actual rates adjust quarterly), and excludes state penalties, estimated tax penalties, first-time abatement, and reasonable cause relief. It is not tax advice. Consult a licensed CPA about your specific situation.

Estimating a penalty is the easy part. Abating it, fixing the filing pattern that caused it and planning so it does not recur is part of our tax services in Atlanta.

Frequently Asked

IRS penalty questions, answered.

What is the penalty for filing taxes late?
The federal failure-to-file penalty is 5 percent of the unpaid tax per month (netting to 4.5 percent when the failure-to-pay penalty runs concurrently), capped at 25 percent. The failure-to-pay penalty is an additional 0.5 percent per month, capped at 25 percent, plus daily-compounded interest.
Does filing an extension avoid penalties?
An extension eliminates the failure-to-file penalty, which is ten times larger than the failure-to-pay penalty. It does not extend the payment deadline: tax paid after the original due date still accrues the 0.5 percent monthly failure-to-pay penalty plus interest, even with a valid extension.
Can IRS penalties be removed?
Often yes. First-time penalty abatement is available to taxpayers with a clean three-year compliance history, and reasonable cause relief applies to circumstances like serious illness or disaster. Interest generally cannot be abated unless the underlying penalty is removed.

Behind on a filing or facing penalties?

Free 30-minute consultation. Penalty abatement is often available; the sooner you act, the more options exist.

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