Generally, the tax deadline is April 15. The IRS checks your tax return for accuracy, and if there are any issues, you'll receive a bill. Let's break down what that bill might include:
Interest
Interest accrues on any unpaid tax from the due date of your return until the date you fully pay it off. This applies even if you've filed an extension.
The interest rate is determined quarterly and is the federal short-term rate plus 3 percent.
Interest compounds daily, so the longer it takes to pay, the more it adds up.
You can find the current quarterly interest rate on underpayments on the IRS website.
Penalties
The IRS may charge penalties for different reasons. Here are some common ones:
Failure-to-Pay Penalty:
If you file your return but don't pay all your taxes by the due date, you'll likely face a penalty.
The failure-to-pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25%, of the unpaid tax amount.
If the tax remains unpaid 10 days after the IRS issues a notice of intent to levy property, the rate increases to one percent.
If you file on time and request an installment agreement, the rate decreases to one-quarter of one percent for any month the agreement is in effect.
The IRS applies payments to the tax first, then to any penalty, and finally to interest. The penalty amount on your bill is the total up to the notice date, not the monthly charge.
Failure-to-File Penalty:
If you owe tax and don't file on time (including extensions), you may also be charged a penalty.
The failure-to-file penalty is usually five percent of the tax owed for each month or part of a month that your return is late, up to a maximum of 25%.
If your return is over 60 days late, there's a minimum penalty, which is the lesser of $510 (for tax returns required to be filed in 2025) or 100% of the tax owed.
How to Avoid Penalties and Interest
The best way to avoid these charges is to file your return and pay your taxes by the due date. If you can't afford to pay in full, consider these options:
Payment Options: The IRS offers various electronic payment options on the Payments page, which are the most convenient ways to pay.
Paying by Mail: If you prefer to pay by mail, use the tear-off stub on your bill and the provided return envelope. Ensure your payment is credited correctly by:
Making your check or money order payable to the United States Treasury.
Entering the taxpayer identification number of the primary taxpayer.
Entering the tax year and form number.
Including your name, address, and telephone number on the payment.
Never sending cash.
Penalty Relief
If you owe a penalty, you might be eligible for relief:
First Time Abate: You may qualify for penalty relief under First Time Abate.
Reasonable Cause: If you don't qualify for First Time Abate, the IRS may waive penalties if you can show reasonable cause for the delay and that it wasn't due to willful neglect. Making a good faith payment as soon as possible can help demonstrate reasonable cause.
If you believe you have reasonable cause, send your explanation along with the bill to your service center, or call the IRS at 800-829-1040.
The IRS doesn't generally waive interest charges, which continue to accrue until all tax, penalties, and interest are fully paid.
Special Circumstances
There are exceptions to the general deadlines:
Members of the Armed Forces serving in a combat zone or contingency operation. Refer to Publication 3, Armed Forces' Tax Guide.
U.S. citizens or resident aliens working abroad. Refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.
Victims in certain disaster situations. The IRS can postpone filing and payment deadlines in these cases. Refer to Disaster assistance and emergency relief for individuals and businesses.
Reviewing Your Notice or Bill
It's important to review your notice or bill carefully. If you believe there's an error, contact the IRS office that sent it to you within the given time frame or call the number listed on the notice. Provide copies of any records that can help the IRS address the error. If the error is confirmed, the IRS will adjust your account and send you a revised notice.
For more information, refer to Publication 594, The IRS Collection Process PDF, the Penalties page, and Chapter 1 of Publication 17, Your Federal Income Tax for Individuals.