How Do You Calculate the Late Payment Penalty and the Interest on IRS Tax?


Quick Answer

There is both a failure-to-file penalty and a failure-to-pay penalty that can be imposed by the IRS, according to its official website. The failure-to-file penalty is typically more than the failure-to-pay penalty, which is usually half of 1 percent per month on the unpaid tax amount.

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Full Answer

The failure-to-pay penalty goes into effect for each month after the tax filing deadline, according to the IRS. The penalty for filing late is normally 5 percent of the unpaid tax amount per month past the tax filing deadline, not to exceed 25 percent of the unpaid taxes. If both penalties apply, the most that is charged is a maximum of 5 percent per month of the unpaid taxes.

If an individual requested a filing extension for his income tax return and paid a minimum of 90 percent of the tax owed with that request, he may not be charged a failure-to-pay penalty; however, he must pay the remaining balance by the extended due date, according to the IRS. If an individual files a tax return over 60 days after the deadline or extended due date, the minimum penalty is the lesser of 100 percent of the unpaid taxes or $135. Late-filing penalties and late-payment penalties do not apply to individuals who can prove reasonable cause for not filing or paying by the due date.

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