Free tool
IRS Interest & Penalty Estimator
For individual federal income tax (Form 1040) balances. See roughly what the IRS adds for filing late, paying late and interest, and what each charge means.
Covers individual federal income tax only (Form 1040). Not for business, payroll or excise taxes. Texas has no state income tax, so there is no state penalty to figure.
This is an estimate, not the IRS’s figure. Your notice may differ. First Time Abate, the IRS’s new Automatic Exemption from Penalty (for 2025 returns and later) or reasonable cause may reduce or remove the penalties, and the interest on them. Joshua Santana, EA can request penalty relief for you and set up an IRS payment plan.
How the IRS figures each charge
Failure-to-file penalty
Generally 5% of the unpaid tax for each month or part of a month the return is late, up to 25%. “Late” means after the due date including a valid extension. If the return is more than 60 days late, there is a minimum penalty: the smaller of the tax owed or a set amount ($525 for returns due after December 31, 2025; $510 for 2025; $485 for 2024). In any month when both penalties apply, the late-filing penalty is reduced by the late-payment penalty, so the two together are 5% a month.
Failure-to-pay penalty
0.5% of the tax still unpaid for each month or part of a month after the original due date, up to 25%. You are charged the full month even if you pay before it ends. It drops to 0.25% a month during an IRS payment plan if you filed on time, and rises to 1% a month if the tax isn’t paid within 10 days of a notice of intent to levy.
Interest
Charged on unpaid tax from the original due date until it is paid, even if you have an extension. The rate for individuals is the federal short-term rate plus 3 percentage points, set every quarter, and it compounds daily. Interest also runs on the failure-to-file penalty from the due date of the return (including extensions). Interest can’t be removed for reasonable cause or first-time relief, but if a penalty is removed, the interest on it goes too.
Got an IRS letter about the balance? Look it up in our IRS Notice Lookup → · IRS representation →
IRS interest rates for individuals (underpayments)
Annual rate for each calendar quarter. A new quarter’s rate doesn’t change the rate for earlier quarters.
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2026 | 7% | 6% | 7% | 7% |
| 2025 | 7% | 7% | 7% | 7% |
| 2024 | 8% | 8% | 8% | 8% |
| 2023 | 7% | 7% | 7% | 8% |
| 2022 | 3% | 4% | 5% | 6% |
| 2021 | 3% | 3% | 3% | 3% |
| 2020 | 5% | 5% | 3% | 3% |
| 2019 | 6% | 6% | 5% | 5% |
Latest quarter in this table: Q4 2026. Rates last checked: . IRS quarterly interest rates ↗
What this covers and what it leaves out
Covers
- Failure-to-file and failure-to-pay penalties on individual federal income tax shown on a Form 1040 return.
- Interest on the unpaid tax and on the failure-to-file penalty, using the IRS quarterly rates from 2019 on, compounded daily.
- Form 4868 extensions, partial payments and an IRS payment plan.
Leaves out
- Business, payroll, excise and state taxes (Texas has no state income tax).
- The estimated tax penalty (Form 2210), accuracy-related penalties and the 75% fraud penalty.
- Extra tax found later by the IRS (audits, CP2000 notices), which follows different start dates.
- The 1% monthly rate after a notice of intent to levy.
- Interest on the failure-to-pay penalty, which the IRS charges from the date of its notice. We can’t know that date, so it isn’t included.
- Disaster postponements, unless you type in your postponed due date.
- Penalty relief such as First Time Abate, the new Automatic Exemption from Penalty or reasonable cause.
Questions
Is this the amount the IRS will bill me?
No. It’s an estimate from the rules the IRS publishes. Your notice may differ because of payment dates, credits, notice dates, relief you qualify for or other items on your account. Use your IRS notice or online account for the exact balance.
Does an extension stop penalties and interest?
An extension (Form 4868) gives you until October to file, so it can prevent the failure-to-file penalty. It doesn’t extend the time to pay. Interest and the failure-to-pay penalty still run from the April due date on any tax not paid by then.
Can the penalties be removed?
Often, yes. If you filed and paid on time for the prior three years, you may qualify for First Time Abate. For 2025 tax-year returns and later, the IRS is starting an Automatic Exemption from Penalty (AEP) that skips these penalties for taxpayers with that clean history. Otherwise, reasonable cause (such as a serious illness or disaster) may apply. Interest on the tax itself generally stays, but interest on a removed penalty is removed too.
What if I can’t pay it all now?
File on time (or as soon as you can) anyway, since the late-filing penalty is much larger than the late-payment penalty. Then pay what you can and ask about an IRS payment plan. If you filed on time, the late-payment penalty drops to 0.25% a month while the plan is in effect.