The penalty for filing taxes late with the IRS generally includes the following key points:
- The failure-to-file penalty is 5% of the unpaid tax owed for each month or part of a month your return is late, up to a maximum of 25% of the tax due
- If you file more than 60 days after the due date, the minimum penalty is $525 for 2025 (up from $510 in 2024) or 100% of the unpaid tax, whichever is less
- The failure-to-pay penalty is 0.5% of the unpaid tax for each month or part of a month the tax remains unpaid, also capped at 25% of the unpaid tax
- When both penalties apply in the same month, the failure-to-file penalty is reduced by 0.5%, resulting in a combined penalty of 5% per month (4.5% late filing + 0.5% late payment), up to 25% for failure to file and 25% for failure to pay, which can total up to 47.5% of the tax owed if unpaid for five months or more
- Interest also accrues daily on the unpaid tax starting the day after the due date, with the current interest rate around 7-8% annually, compounding daily
- No penalty applies if you are due a refund, but you must file within three years to claim it
In summary, the IRS charges a steep penalty for late filing if you owe taxes: 5% per month up to 25%, plus a 0.5% per month penalty for late payment, with combined penalties potentially reaching 47.5% after five months, plus interest. Filing as soon as possible minimizes these costs
