Introduction
If you paid your federal taxes late, the IRS adds interest and penalties to what you owe. This IRS Interest Calculator adds those amounts up so you know your real payoff figure.
Enter your tax year, the amount you owed, your due date, and the date you plan to pay. The tool uses the official IRS quarterly interest rates and compounds the interest daily, the same way the IRS does under IRC §6601 and §6622.
You can also add the penalties that apply to you, like the Failure to File penalty (5% per month) and the Failure to Pay penalty (0.5% per month). Mark if you filed an extension or have an installment agreement, and the math changes to match. Partial payments and balance changes from an audit or CP2000 notice can be added too, and each one lowers the balance from the day it hits.
Results include the total due, a step-by-step breakdown, charts, and a full report showing the tax code rule behind every line. Use it to check an IRS notice, plan a payoff, or see what waiting a few more months will cost you.
How to use our IRS Interest Calculator
Enter your unpaid tax, the dates it was due and paid, and any penalties that apply. The calculator returns your IRS interest, penalties, and total amount due, plus a step-by-step breakdown and a full report by rate period.
Tax Year: Pick the year the unpaid tax belongs to. This fills in the normal federal due date for you.
Taxpayer Type: Choose Individual, C-Corporation, or Trust / Estate. C-Corporations that owe more than $100,000 pay a higher interest rate.
Original Tax Amount Owed: Type the unpaid tax only. Do not add penalties or interest here.
Original Tax Due Date: Enter the date the tax was due. IRS interest starts on this date. Change it if your due date was different.
Final Payoff Date: Enter the date you plan to pay in full. Use today for your current balance, or a later date to see what you will owe then.
Extension Filed: Check this box if you filed a timely extension. It stops the late filing penalty until the extended date, but interest and the late payment penalty still run.
Installment Agreement: Check this box if the IRS approved a payment plan. The late payment penalty drops from 0.5% to 0.25% per month.
Failure to File (FTF): Check this if the return was filed late. It adds 5% of the unpaid tax per month, up to 25%.
Failure to Pay (FTP): Check this if the tax was not paid by the due date. It adds 0.5% of the unpaid tax per month, up to 25%.
Accuracy-Related Penalty: Check this if the IRS charged a 20% penalty for a wrong or understated amount.
Override Interest Rate: Leave this blank to use the official IRS quarterly rates. Enter a rate only if you want one flat rate for the whole period.
Payments & Credits: Click Add Payment and enter the date and amount of each payment made after the due date. Each payment lowers the balance, so less interest builds up after that date.
Tax Balance Adjustments: Click Add Adjustment for changes that are not payments, like an audit bill, a CP2000 notice, or an amended return. Use a plus number to raise the balance and a minus number to lower it.
Calculate, Reset, and Print: Click Calculate Interest & Penalties to see your results. Click Reset Calculator to start over, or Print Results to save a copy.
IRS Interest and Penalties on Unpaid Taxes
When you owe federal tax and do not pay it by the due date, the IRS charges you two things: interest and penalties. Both start on the original due date of the return, even if you filed an extension. An extension gives you more time to file your paperwork, not more time to pay.
How IRS Interest Works
Interest on unpaid tax is set by IRC §6601 and §6621. The rate is the federal short-term rate plus 3% for most people. Big C-corporation underpayments over $100,000 pay short-term rate plus 5%.
The IRS sets a new rate every three months (each quarter). So a long unpaid balance may use several different rates over time. Under IRC §6622, the interest compounds daily. That means each day you owe a little interest on your tax, your penalties, and the interest that already piled up. The daily rate is the yearly rate divided by 365 (or 366 in a leap year).
The Main Penalties
- Failure to File (IRC §6651(a)(1)): 5% of the unpaid tax each month, or part of a month, that the return is late. It stops at 25%.
- Failure to Pay (IRC §6651(a)(2)): 0.5% of the unpaid tax each month, or part of a month, up to 25%. It drops to 0.25% a month while an approved installment agreement is active (IRC §6651(h)).
- Accuracy-Related Penalty (IRC §6662): a one-time 20% charge when you understate your tax through carelessness or a big mistake.
If both the file penalty and the pay penalty hit in the same month, the 5% file penalty is cut by the 0.5% pay penalty, so you are charged 4.5% that month (IRC §6651(c)(1)). That combined file penalty tops out after 5 months, at 22.5%.
If your return is more than 60 days late, there is a minimum failure-to-file penalty. It is the smaller of a set dollar amount (which rises each year for inflation) or 100% of the tax you owe.
Why Paying Something Helps
Every payment you make lowers the balance from that day forward. A smaller balance means less interest is added each day and smaller monthly penalties. Even a partial payment slows the growth. Audit changes, CP2000 notices, and amended returns can also raise or lower the balance on the date they take effect.
Things to Remember
- Interest keeps running until the tax, penalties, and interest are paid in full.
- Interest on penalties can start on the due date of the return, not the day you get the notice.
- Penalties can sometimes be removed for reasonable cause or first-time abatement, but interest is rarely removed.
- The IRS posts its current quarterly rates on IRS.gov, and they change often.
These numbers are estimates for planning. Your real IRS notice may differ a little based on posting dates, how the IRS applies your payments, and any relief you qualify for.