File your federal return late and the IRS charges 5% of your unpaid tax for each month it’s missing, up to 25%. Pay late and the charge is 0.5% per month, also capped at 25%. On top of both, interest runs daily on whatever you owe; the rate for the first quarter of 2026 is 7% per year.1Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026 So the answer to how much the IRS charges for late taxes depends on three things: whether you filed, whether you paid, and how long the balance has been sitting.
The Failure-to-File Penalty
Missing the filing deadline is the more expensive mistake. The IRS charges 5% of your unpaid tax for each month or part of a month your return is late.2Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax One day past the deadline counts as a full month. The penalty keeps growing every month you don’t file, until it reaches 25% of the unpaid balance.
The math runs on the tax you still owe after subtracting withholding, estimated payments, and credits. If those already cover your bill, the failure-to-file penalty produces no charge, because 5% of zero is zero.2Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax What triggers the penalty is a missing return combined with an outstanding balance.
The Failure-to-Pay Penalty
If you file on time but don’t pay in full by the original due date, the IRS charges 0.5% of the unpaid tax per month, again capped at 25%.2Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax This penalty also applies if you filed late and still have a balance.
Partial payments help, but the IRS applies them to tax first, then penalties, then interest.3Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges Reducing the underlying tax as soon as you can is what slows the growth of everything else.
What Happens When You File and Pay Late
The two penalties don’t fully stack. In any month you’re hit with both, the 5% filing penalty is reduced by the 0.5% payment penalty, so you’re charged 4.5% for failing to file and 0.5% for failing to pay — 5% total that month.4Internal Revenue Service. Failure to File Penalty That offset lasts about five months, at which point the filing penalty caps out at 22.5%. After that, the 0.5% payment penalty keeps running on its own until it hits its own 25% ceiling.5Internal Revenue Service. Failure to Pay Penalty
Combined, the two penalties can reach 47.5% of your original unpaid tax. The filing penalty accrues roughly ten times faster than the payment penalty, which is why the standard advice holds even when your account is empty: file the return on time, then deal with the balance. Skipping the return costs far more than skipping the payment.
Interest on Your Unpaid Balance
Interest is a separate charge, and it runs from the original due date until you pay in full. Extensions, payment plans, and penalty relief don’t stop it.6Office of the Law Revision Counsel. 26 USC 6601 – Interest on Underpayment, Nonpayment, or Extensions of Time for Payment, of Tax Interest applies to the tax itself and to any assessed penalties, so your balance grows on more than one front.
The rate is the federal short-term rate plus three percentage points, reset every quarter.7Office of the Law Revision Counsel. 26 USC 6621 – Determination of Rate of Interest For the first quarter of 2026, the individual underpayment rate is 7% per year.1Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026 Unlike the monthly penalties, this interest compounds daily.8Office of the Law Revision Counsel. 26 USC 6622 – Interest Compounded Daily On a $5,000 balance at 7%, that comes to roughly $29 in the first month, and the daily amount ticks up slightly each day as it builds on itself. There is no cap on interest. It runs until the balance is gone.
The Minimum Penalty After 60 Days
Once your return is more than 60 days late, a minimum failure-to-file penalty kicks in. For returns due in 2026, that minimum is the lesser of $525 or 100% of the unpaid tax.4Internal Revenue Service. Failure to File Penalty If you owe $200 and file six months late, the penalty is $200. If you owe $5,000, the floor is $525, though the standard monthly calculation will usually already exceed that after two months.3Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges
Higher Charges When Failure to File Is Fraudulent
If the IRS determines a failure to file was fraudulent rather than a mistake, the monthly rate triples to 15%, and the cap rises to 75% of the unpaid tax.2Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax The IRS carries the burden of proving fraud, so this rate applies only where there is clear and convincing evidence of intentional wrongdoing, not to honest oversights.
How an Extension Changes the Math
Filing Form 4868 buys you six more months to submit the return. It does not buy time to pay.9Internal Revenue Service. IRS Reminds Taxpayers an Extension to File Is Not an Extension to Pay Taxes Any tax still unpaid after the April deadline starts collecting the 0.5% monthly payment penalty and 7% daily interest right away, extension or not.6Office of the Law Revision Counsel. 26 USC 6601 – Interest on Underpayment, Nonpayment, or Extensions of Time for Payment, of Tax
What the extension does protect against is the much larger 5% filing penalty. If you file by the extended deadline, that penalty stays off your account entirely, which is why an extension is worth requesting even if you know you’ll owe.
Reducing or Removing the Penalties
Both penalties can be reduced or wiped out through IRS relief programs. Interest is a different story: even when penalties are waived, interest on the underlying tax keeps running.
First-Time Abate
First-Time Abate is an administrative waiver that can remove the failure-to-file, failure-to-pay, or failure-to-deposit penalty for a single tax period. You qualify if you filed the same type of return on time (or had no filing requirement) for the three years before the penalized year and have no unresolved penalties for those years.10Internal Revenue Service. IRM 20.1.1 Introduction and Penalty Relief Request it by calling the number on your penalty notice or writing to the IRS.11Internal Revenue Service. Administrative Penalty Relief
Reasonable Cause
If First-Time Abate isn’t available, you can ask for reasonable cause relief by showing something outside your control kept you from filing or paying. The IRS weighs situations like natural disasters or fires that destroyed records, serious illness or a death in the immediate family, inability to obtain necessary records, and system issues that blocked electronic filing or payment.12Internal Revenue Service. Penalty Relief for Reasonable Cause A formal request goes on Form 843 with a written explanation and supporting evidence such as medical or insurance records.13IRS.gov. Instructions for Form 843 (Rev. December 2024)
Payment Plans
Setting up an installment agreement cuts the ongoing failure-to-pay penalty in half, from 0.5% to 0.25% per month, as long as your return was filed on time.5Internal Revenue Service. Failure to Pay Penalty Interest continues at the standard rate, so paying more upfront still saves money. A short-term plan of 180 days or less has no setup fee; a long-term monthly plan carries a setup fee from $22 (online with direct debit) to $178, with reduced or waived fees for low-income taxpayers.14Internal Revenue Service. Payment Plans; Installment Agreements
One last thing worth checking: if you owe state income tax as well, most states run their own separate late-filing and late-payment penalties on top of the federal charges, and the rates and caps vary widely.