The IRS updates rates quarterly. Current rate is approximately 8%.
Estimated Breakdown
How the IRS Penalty Calculator Works
If you owe taxes and fail to file or pay on time, the IRS applies several different types of penalties and interest charges. Understanding these components helps you estimate your total liability.
1. Failure to File Penalty
This penalty applies if you do not file your tax return by the due date. The penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. This penalty will not exceed 25% of your unpaid taxes.
2. Failure to Pay Penalty
This penalty is triggered if you do not pay the taxes you owe by the due date. The penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. Like the filing penalty, this is capped at 25%.
3. Combined Penalty Logic
If both the Failure to File and Failure to Pay penalties apply in the same month, the 5% Failure to File penalty is reduced by the 0.5% Failure to Pay penalty. In effect, you are charged a 5% total penalty for that month (4.5% for filing, 0.5% for paying).
4. IRS Interest Rates
The IRS charges underpayment interest that is updated quarterly. This interest is calculated daily and compounded. For individuals, the rate is usually the Federal Short-Term Rate plus 3%.
Example Calculation
Imagine you owe $2,000 and filed your return 3 months late and also paid 3 months late:
Unpaid Tax: $2,000
Late Filing (3 months): 4.5% x 3 = 13.5% ($270)
Late Payment (3 months): 0.5% x 3 = 1.5% ($30)
Total Penalty: $300 + Interest charges.
function calculateIRSPenalty() {
var taxAmount = parseFloat(document.getElementById('taxAmount').value);
var dueDate = new Date(document.getElementById('dueDate').value);
var paidDate = new Date(document.getElementById('paidDate').value);
var interestRate = parseFloat(document.getElementById('interestRate').value) / 100;
var applyFiling = document.getElementById('lateFiling').checked;
var applyPaying = document.getElementById('latePayment').checked;
if (isNaN(taxAmount) || isNaN(dueDate.getTime()) || isNaN(paidDate.getTime())) {
alert("Please enter a valid amount and select both dates.");
return;
}
if (paidDate dueDate.getDate()) {
months += 1;
}
// Minimal 1 month if it's even 1 day late
if (months 0) {
months = 1;
}
var filingPenalty = 0;
var payingPenalty = 0;
var totalInterest = 0;
// 1. Failure to Pay Penalty (0.5% per month, max 25%)
if (applyPaying) {
var payingRate = 0.005 * months;
if (payingRate > 0.25) payingRate = 0.25;
payingPenalty = taxAmount * payingRate;
}
// 2. Failure to File Penalty (5% per month, max 25%)
if (applyFiling) {
var filingRatePerMonth = 0.05;
// If both apply, filing penalty is reduced by payment penalty for those months
if (applyPaying) {
filingRatePerMonth = 0.045;
}
var filingRateTotal = filingRatePerMonth * months;
if (filingRateTotal > 0.25) filingRateTotal = 0.25;
filingPenalty = taxAmount * filingRateTotal;
}
// 3. Simple daily interest calculation (Estimate)
// Formula: Principal * (Rate/365) * Days
totalInterest = taxAmount * (interestRate / 365) * diffDays;
var totalBalance = taxAmount + filingPenalty + payingPenalty + totalInterest;
var resultsDiv = document.getElementById('irsResults');
var content = document.getElementById('resultsContent');
resultsDiv.style.display = 'block';
content.innerHTML =
'