Behind on taxes? See what the late-filing penalty and daily interest add up to, what waiting costs, and how to stop the meter.
Waiting a year adds about $1,962. Filing stops the failure-to-file penalty even if you can't pay yet.
Estimates for planning, not tax advice or an official balance. IRS interest compounds daily at the federal underpayment rate, updated quarterly.
We work with the best in the business
Two penalties can run at once, and daily compound interest grows on top of both.
| Charge | How it's calculated | Maximum |
|---|---|---|
| Failure-to-file | 5% of unpaid tax per month or part-month | 25% (+ minimum after 60 days) |
| Failure-to-pay | 0.5% per month (0.25% on a payment plan) | 25% |
| Interest | Federal short-term rate + 3% (7% in Q3 2026), compounded daily on tax and penalties | No cap, never stops |
The one move that always helps: file now, even if you can't pay. Filing stops the biggest penalty immediately; only the much smaller interest keeps running.
Five quick questions. You'll get your late-tax numbers, the IRS relief programs that may erase the penalties, and a step-by-step catch-up plan.
0 of 5 answered. Your personalized report unlocks after the last question.
If your last 3 years were clean, First-Time Abatement can remove both penalties with a phone call. Payment plans halve the failure-to-pay rate. The order of operations matters.
30 days free · Cancel anytime
$28 USD/mo
One plan. One tier.
It's clear that the software was created by a team passionate about helping businesses succeed. They go above and beyond to provide support, which adds tremendous value to an already excellent product.
No learning curve, the built-in AI assistant answers all questions clearly. Easy to upload receipts, reports are clear and easy to read.
My experience with them has been great. They're very responsive and helpful. The platform is continuously evolving and improving.
It's been really good. It works a lot like QuickBooks but at a fraction of the price. Definitely give this system a go.
Easy to use and AI features save a lot of time. Love the easy integration! The team are super responsive as well.
It's 5% of your unpaid tax for each month (or part of a month) the return is late, capped at 25%. If you're more than 60 days late there's also a minimum: the smaller of a set amount ($485 to $525, depending on the year the return was due) or 100% of the tax owed. When the failure-to-pay penalty runs in the same month, the failure-to-file portion drops to 4.5% so the two together stay at 5% per month.
0.5% of the unpaid tax per month or part of a month, up to 25% in total. For a return you filed on time, it drops to 0.25% per month while an approved IRS payment plan is in place. It's ten times smaller than the failure-to-file penalty, which is why filing on time matters even when you can't pay.
The federal short-term rate plus 3%, set every quarter (7% for July to September 2026), compounded daily on the tax and the penalties. Interest can't be waived except in rare cases, which is why waiting gets expensive even after penalties max out.
Yes. The failure-to-file penalty (5% per month) is ten times the failure-to-pay penalty (0.5% per month). Filing immediately stops the big one, and you can set up an IRS payment plan for the balance, which also halves the failure-to-pay rate.
Often, yes. First-Time Abatement removes failure-to-file and failure-to-pay penalties if you filed and paid on time for the previous 3 years. Reasonable-cause relief exists for situations like illness or disaster. Interest on the tax itself generally stays, but interest charged on removed penalties goes with them.
It expires. You must claim a refund within 3 years of the return's due date; after that the money stays with the Treasury permanently. If you're owed refunds for old years, filing them is found money, but only until the deadline passes.
Free, no sign-up. It applies the IRS penalty formulas and the quarterly underpayment interest rates (verified 2026-07-26). It's an estimate for planning: your actual balance depends on the assessed return, payment dates, and any relief the IRS grants.
ReInvestWealth rebuilds your books from bank statements and keeps you current so this never happens again.
30 days free · Cancel anytime