Estimate IRS failure-to-file and failure-to-pay penalties plus interest on an unpaid tax balance.
Educational estimate. IRS interest rates change quarterly; consult a tax professional.
We apply the failure-to-pay penalty (0.5%/month), failure-to-file penalty (5%/month, reduced when both apply), and interest (~8%/year), each capped per IRS rules.
The IRS charges separately for filing late (5% per month) and paying late (0.5% per month), plus daily-compounding interest. When both apply in the same month the file penalty is reduced slightly, but the lesson stands: not filing is roughly ten times costlier than not paying. If this is your first slip-up, ask about first-time penalty abatement — the IRS waives penalties for otherwise-compliant taxpayers more often than people realize.
5% of unpaid tax per month, up to 25% — far larger than failure-to-pay.
0.5% per month, up to 25%.
First-time penalty abatement and reasonable-cause relief exist — ask the IRS.
No — it's an estimate.