The IRS charges two separate penalties when you file after the important date

If you file your federal tax return after April 15 (or the next business day if April 15 falls on a weekend), the IRS charges a failure-to-file penalty and a failure-to-pay penalty if you owe taxes. These are not the same penalty — they stack on top of each other and on top of any interest owed. The failure-to-file penalty is steeper and accrues faster, so filing even a few days late costs more than paying late.

The exact dollar amount depends on how much tax you owe and how late you file. There is no flat fee. The IRS calculates both penalties as percentages of your unpaid tax, and both grow larger the longer you wait.

Key Takeaways

  • The failure-to-file penalty is 5% of unpaid taxes per month (or part of a month) you are late, up to a maximum of 25% total.
  • The failure-to-pay penalty is 0.5% of unpaid taxes per month, also up to 25% maximum, and runs separately from the filing penalty.
  • Interest accrues daily on all unpaid taxes starting from the original due date, currently at a rate set quarterly by the IRS.
  • Filing late but paying in full by the important date costs you only interest, not the failure-to-file penalty.
  • If you owe nothing or are due a refund, there is no penalty for filing late, though you lose the refund if you wait more than three years.

How the failure-to-file penalty works

The failure-to-file penalty is 5% of your unpaid tax for each month (or part of a month) that your return is late. If you file one day late and owe $1,000, you owe 5% of $1,000, which is $50. If you file two months late, you owe 10%. The penalty caps at 25% of unpaid taxes, which means filing more than five months late does not increase the penalty further.

This penalty applies only if you owe taxes. If you are due a refund, the IRS does not charge it. The penalty also does not explore if you had a valid reason for filing late — for example, if you requested an extension before the important date. An extension gives you until October 15 to file without penalty, though you still owe any taxes due by April 15.

The IRS counts even partial months as a full month. If you file on May 1 (16 days late), you owe the full 5% penalty. If you file on May 31, you owe 10%.

How the failure-to-pay penalty works

The failure-to-pay penalty is 0.5% of unpaid taxes per month, also capping at 25% total. This penalty applies to any tax you do not pay by April 15, regardless of whether you file on time. It runs at the same time as the failure-to-file penalty, so both accrue together.

If you file on time but do not pay, you avoid the failure-to-file penalty but still owe the failure-to-pay penalty. If you file late and do not pay, you owe both. After six months of non-payment, the failure-to-pay penalty increases to 1% per month instead of 0.5%.

You can reduce or eliminate the failure-to-pay penalty by setting up a payment plan with the IRS. If you enter an installment agreement before the IRS issues a notice of intent to levy, the penalty drops to 0.25% per month while the plan is active.

Interest charges on late payments

Beyond the penalties, the IRS charges interest on any unpaid tax from the original due date forward. Interest is not a penalty — it is the cost of borrowing money from the government. The rate changes every quarter and is set by federal law. For 2024, the rate is 8% per year, compounded daily, though this changes quarterly.

Interest accrues whether you file on time or late. If you owe $1,000 and file six months late, you owe the $1,000 plus interest for six months plus both penalties. The penalties and interest together can easily exceed 30% of the original tax owed.

Interest cannot be waived or reduced by the IRS, even if you have a good reason for paying late. Penalties can sometimes be reduced if you show reasonable cause, but interest is automatic.

When you do not owe a penalty

If you file late but are due a refund, you owe no failure-to-file penalty. The IRS does not penalize you for filing late when you are not giving them money. However, you do lose the refund if you wait more than three years to file. The IRS keeps any refund owed for more than three years after the original due date.

If you filed for an extension before April 15, you have until October 15 to file without penalty. The extension does not extend your payment important date — if you owe taxes, they are still due April 15 — but it removes the failure-to-file penalty if you file by October 15.

If you can show the IRS that you had reasonable cause for filing late, you may be able to have the failure-to-file penalty removed. Reasonable cause includes serious illness, death in the family, or reliance on a tax professional who missed the important date. You must request this in writing and provide documentation.

How to calculate what you owe

The total amount you owe for filing late is: unpaid tax + interest + failure-to-file penalty + failure-to-pay penalty. Each piece is calculated separately.

The IRS calculates this automatically when you file. You do not need to compute it yourself. When you file your late return, the IRS will send you a bill showing the original tax, the penalties, and the interest. You can also call the IRS at 1-800-829-1040 to ask what you owe before you file.

If you use tax software or a tax professional to file late, they will show you an estimate of penalties and interest before you submit. This estimate is usually accurate within a few dollars, depending on the exact date you file and the current interest rate.

What happens if you do not pay after filing

If you file your return but do not pay the tax owed, the IRS will send you a bill. You have until the date on the bill to pay without additional action. If you do not pay by that date, the IRS can place a lien on your property, levy your bank account, or garnish your wages.

The longer you wait to pay, the larger the failure-to-pay penalty grows. After six months of non-payment, the penalty rate doubles from 0.5% to 1% per month. After ten years, the IRS can write off the debt, but this is rare and does not happen automatically.

If you cannot pay in full, you can set up a payment plan. The IRS offers short-term plans (120 days or less) and long-term installment agreements. Setting up a plan stops the IRS from taking collection action and reduces the failure-to-pay penalty rate.

Frequently Asked Questions

Do I owe a penalty if I file late but pay everything I owe on time?

No. If you file after the important date but pay all taxes owed by April 15, you owe no failure-to-file penalty. You owe only interest on the unpaid tax from April 15 until you file. This is why some people file late intentionally if they know they will owe money — they pay the interest but avoid the larger failure-to-file penalty.

Can the IRS remove the penalty if I have a good reason?

The IRS may remove the failure-to-file penalty if you show reasonable cause in writing. Reasonable cause includes serious illness, death in the family, or reliance on a tax professional who missed the important date. You must request this when you file or within a reasonable time after. Interest cannot be removed under any circumstances.

What if I file my return but cannot pay the full amount?

Set up a payment plan with the IRS before they send you a collection notice. You can request a plan online, by phone at 1-800-829-1040, or by mail. A payment plan stops wage garnishment and reduces the failure-to-pay penalty from 0.5% to 0.25% per month while the plan is active.

How long do I have to file before I lose my refund?

You have three years from the original due date to file and claim a refund. If you file after three years, the IRS keeps the refund. There is no penalty for filing late if you are due a refund, but you lose the money if you wait too long.

Does an extension prevent the penalty?

An extension prevents the failure-to-file penalty if you file by October 15. It does not extend your payment important date — taxes are still due April 15 — so you will owe the failure-to-pay penalty if you do not pay by then. An extension is useful only if you need more time to gather documents or work with a tax professional.