What does an IRS penalty actually cost?

The latest published underpayment rate is 7.000000000000001% annualized. Add an installment due date to account for historical rate changes, or use a fixed-rate illustration. Late filing and payment penalties are separate.

2026 rates · Illustrative estimate · Not tax advice

What actually happens if you skip a payment: The IRS doesn't call. There's no audit flag. A small interest charge accrues on the shortfall and calculates automatically when you file in April — usually less than dinner for a typical missed quarter.

Quarterly estimate you underpaid

The amount you should have paid the IRS that quarter but didn't

Installment due date (optional)

Add a date to use published rates for each period. Leave blank for a fixed-rate illustration.

How long until you pay it

Dated estimates stop at April 15 after the tax year. Days count from the day after the installment due date.

Your underpayment penalty

$26

7.000000000000001% fixed rate · 90 days · on $1,500

Fixed-rate illustration; historical quarterly changes are not applied without a date.

Less than a tank of gas.

7.000000000000001%

Latest published
annual rate

24%

Typical credit
card APR

The IRS is cheaper than a credit card. The penalty accrues at the federal short-term rate + 3%, prorated daily. It stops the moment you pay.

How to avoid it next time

Pay 100% of last year's tax bill (110% for higher-income taxpayers) in four equal quarterly installments — or 90% of this year's projected bill. Hit either safe harbor and the IRS cannot charge an underpayment penalty, even if you end up owing more in April.

First-time penalty abatement: If this is your first offense and you've filed on time in prior years, the IRS will often waive the penalty entirely. Worth asking before you pay.

Estimates only. The latest published underpayment rate is 7.000000000000001% through 2026-12-31. Dated estimates use simple daily accrual for one unchanged shortfall; they do not compute safe-harbor eligibility, withholding allocation, partial payments, or disaster relief. Late filing and payment penalties per IRC §6651. When both filing and payment penalties apply in the same month, the late filing penalty is reduced by the payment penalty amount — the combined rate is 5%/month, not 5.5%. Minimum late filing penalty of $510 applies when a return is more than 60 days late. Not tax advice — consult a CPA for your specific situation.