Frequently asked questions

Late filing costs 5% of the unpaid tax per month (capped at 25%); late payment costs 0.5% per month (also capped at 25%). When both run at once, the filing penalty drops to 4.5% so the combined monthly hit stays 5%. Filing late costs ten times more than paying late, which is why you should always file even when you can't pay.

Yes, always. Filing on time avoids the expensive 5%-a-month penalty entirely, leaving only the 0.5%/month payment penalty and interest. An IRS payment plan then cuts the payment penalty rate in half while it's active.

Only the late-filing penalty, and only if you file by the extended deadline. Payment was still due on the original April date, so the late-payment penalty and interest run from there on anything unpaid. See the deadline tables.

If an income tax return is more than 60 days late, the late-filing penalty has a floor: the lesser of a fixed amount ($525 for returns due in 2026, $510 in 2025, $485 in 2024) or 100% of the unpaid tax. Even a small balance gets an outsized penalty once you pass day 60.

The federal short-term rate plus 3 points, reset quarterly, compounded daily. Right now it's 7%. The complete quarterly table since 2016 is here. Interest also accrues on late-filing and accuracy penalties from the return's original due date.

Per owner, per month: $255 per partner or shareholder per month for returns due in 2026, up to 12 months, even when the business owes no tax. A 10-partner firm one year late owes $30,600. Full guide.

Partly. The July 15, 2020 postponement covered corporations. But the May 17, 2021 postponement was for individuals only, so corporate 2020 returns stayed due April 15, 2021. And the March 2020 partnership/S corp deadline was never postponed at all.

Large corporate underpayments (over $100,000) accrue interest at 2 points above the normal rate starting after an IRS 30-day letter. Our calculator flags when it could apply.

Anyone whose withholding won't cover what they owe: typically freelancers, contractors, landlords, and investors. If your balance after withholding will be $1,000+ and you won't meet a safe harbor, the IRS expects quarterly installments. Our 2026 quarterly estimator computes the payment that keeps you safe.

Hit a safe harbor: pay in at least 90% of this year's tax or 100% of last year's (110% if last year's AGI topped $150,000) through withholding and timely installments. Withholding counts as paid evenly through the year no matter when it happens, so a year-end W-4 boost can retroactively cure missed quarters. Details.

No. The penalty is daily interest on the shortfall, so every day costs money. Pay the missed installment now via IRS Direct Pay. The calculator's estimated-tax mode shows exactly what each open quarter is costing per day.

Often. First-time abatement wipes late-filing and late-payment penalties for taxpayers with a clean three-year history, often in a single phone call. Reasonable-cause relief covers documented hardships. Guide and letter template.

Generally no, because interest is statutory. It disappears only when the thing it accrued on does (an abated penalty's interest goes with it), or in rare cases of IRS error or delay.

A 20% penalty on tax understated through negligence or substantial understatement. It's the penalty behind most audit and CP2000 assessments. Interest on it runs from the return's original due date, so old understatements arrive with years of interest already attached.

It follows IRC §6651, §6654, §6655, §6662, and §6601/§6621 with the exact quarterly rates and the same daily-compounding factor method the IRS uses, validated to the penny against known-good outputs. Assumptions and limits are listed with every result, and the IRS's own figure always controls.

No. All math runs in your browser; the numbers you type are never transmitted. We count page visits with a privacy-respecting counter, nothing more. See the privacy policy.