The penalty for paying taxes late depends on the tax authority and jurisdiction, but here are the key points for the U.S. IRS and some other countries:
United States (IRS)
- Late Payment Penalty : 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid, up to a maximum of 25% of the unpaid tax
- If the IRS sends a notice to pay and you still do not pay within 10 days, the penalty rate increases to 1% per month until paid
- Late Filing Penalty (if you also file your return late): 5% of the unpaid tax for each month or part of a month the return is late, up to 25% max. If both penalties apply in the same month, the late filing penalty is reduced by 0.5%, making it 4.5% plus 0.5% late payment penalty
- If the return is more than 60 days late, the minimum failure-to-file penalty is $510 or 100% of the tax owed, whichever is less
- Interest also accrues on unpaid taxes and penalties starting from the due date until paid, with current interest rates around 8% (subject to change)
United Kingdom (Self Assessment)
- Initial £100 penalty for late filing.
- After 3 months, additional £10 per day, up to £900 max.
- After 6 months, further penalties apply, including 5% of tax due or £300, whichever is greater
France
- A 10% penalty of the tax due applies if payment is more than 45 days late.
- This applies to income tax and other specified taxes
Summary for IRS Late Payment Penalty
Penalty Type| Rate| Maximum Penalty| Notes
---|---|---|---
Late Payment| 0.5% per month| 25% of unpaid tax| Increases to 1% if not paid
within 10 days of IRS notice157
Late Filing| 5% per month (reduced to 4.5% if late payment penalty also
applies)| 25% of unpaid tax| Minimum $510 if over 60 days late25910
Interest| ~8% (variable)| N/A| Accrues daily on unpaid tax and penalties57
In conclusion, paying taxes late to the IRS results in a 0.5% monthly penalty on unpaid taxes, up to 25%, plus interest. Filing late adds a separate penalty of 5% monthly, capped at 25%, but reduced if both apply simultaneously
. Other countries have different penalty structures, such as fixed fines or percentage penalties after certain grace periods
