IRS Interest & Penalty Calculator
IRS Penalty & Interest Calculator
Calculate the Impact of Penalties and Interest on IRS Tax Debt
By Joseph Damiens, Tax Attorney
Free IRS estimate
See how IRS penalties and interest add to what you owe
Penalties and daily-compounding interest can grow a tax balance quickly. Enter a few details for a plain-English estimate of where your balance stands today — and what waiting could cost. This is an estimate, not a bill or payoff figure.
Your situation
Advanced · refine the estimate
Estimated balance due
$0
| Original tax owed | $0 |
| Failure-to-file penalty | $0 |
| Failure-to-pay penalty | $0 |
| Interest (compounded daily) | $0 |
Interest compounds daily at the IRS rate for each calendar quarter your balance was unpaid.How the interest was calculated
Period
Days
Rate
Interest
The cost of waiting
If the balance stays unaddressed and penalties and interest keep running.
You don’t have to face the IRS alone.
Damiens Law is an attorney-led tax resolution firm serving Mississippi, Tennessee, and clients nationwide on IRS matters. A free consultation is the fastest way to find out which options — payment plan, penalty abatement, offer in compromise, or others — may fit your situation.
Not ready to talk? Get the free guide, How to Survive the IRS.
FAQs on the IRS Interest and Penalty Calculator
How is IRS interest calculated?
The IRS uses the federal short-term rate and then adds 3%. As of Q3 2026, the fed rate is 4%, which makes the IRS interest rate 7% – it changes quarterly.
The IRS starts adding on interest the day you’re late, and it compounds daily. That’s why it’s critical to reach out for tax relief before your balance grows any bigger.
What does daily compounding mean with IRS interest?
It means the IRS assesses interest on your tax debt every day. It takes the current interest rate, divides it by 365, multiplies that by your balance, and then adds on the result. The next day, the IRS does the same thing again.
Daily compounding means your IRS tax debt grows every single day. Use the IRS interest & penalty calculator above to estimate how much you owe in interest and penalties now.
How much interest does the IRS charge per month?
IRS monthly interest depends on how much you owe and the current interest rate. Take the current rate, divide it by 12, and multiply that by how much you owe.
But keep in mind that simplified calculation doesn’t take daily compounding into account – for a more accurate number, use an IRS interest and penalty calculator.
What is the IRS failure-to-file penalty?
It’s 5% of your balance due, up to 25%. If your return is more than 60 days late, the IRS applies a minimum penalty of the lesser of $525 or 100% of what you owe. The penalty starts accruing the first day your return is late.
To minimize this IRS penalty, you need to catch up on your unfiled returns. Even if you can’t pay, filing stops this penalty from growing.
What is the IRS failure-to-pay penalty?
This is the penalty for paying late. It’s 0.5% of your balance every month, so it’s 10 times smaller than the penalty for filing late. It doubles to 1% if the IRS sends you an Intent to Levy notice, but it drops to 0.25% if you set up a payment plan.
What happens when both penalties apply at once?
The IRS caps the total monthly penalty at 5%, but both penalties together can get up to 47.5% of your balance.
Can I set up payments? How much are IRS payments with interest?
Yes, the IRS offers multiple payment plans to help taxpayers in different situations. All payment plans charge interest, but this payment plan calculator can help you estimate your monthly payments.