IRS penalty calculator
Estimate an underpayment penalty (Form 2210) or late payment and filing penalties, and check the safe harbor rules. It’s an estimate from your numbers, not advice; Krystal checks the real picture on a call.
Your expected total federal tax for this year (from Form 1040).
Last year's total tax, for the safe harbor.
Over $150k: the 110% rule applies, so you need 110% of last year’s tax to avoid the penalty.
Tax withheld from W-2 wages counts toward the safe harbor.
Total paid (withholding + estimates)
$8,000
25% of this year’s tax paid
Total paid (withholding + estimates): 25% of this year’s tax paid
| Mark | Value |
|---|---|
| Total paid (withholding + estimates) | 25% of this year’s tax paid |
| 90% safe harbor | 90% |
Estimated underpayment penalty
Illustrative$1,963
Penalty plus interest.
Penalty by quarter
$1,963
Q1: $364
| Label | Value |
|---|---|
| Q1 | $364 |
| Q2 | $606 |
| Q3 | $634 |
| Q4 | $359 |
| Quarter | Underpaid | Penalty |
|---|---|---|
| Q1 | $5,200 | $364 |
| Q2 | $10,400 | $606 |
| Q3 | $15,600 | $634 |
| Q4 | $20,800 | $359 |
| Penalty $1,374 + interest $589 | $1,963 |
How the penalty builds
$1,963
Apr 15 · Q1: $364
| Label | Value |
|---|---|
| Apr 15 · Q1 | $364 |
| Jun 15 · Q2 | $970 |
| Sep 15 · Q3 | $1,604 |
| Today | $1,604 |
| Jan 15 (next year) · Q4 | $1,963 |
| Filing Deadline | $1,963 |
How the penalty builds
- Apr 15 · Q1$364Missed or underpaid
- Jun 15 · Q2$970Missed or underpaid
- Sep 15 · Q3$1,604Missed or underpaid
- Today$1,604Today
- Jan 15 (next year) · Q4$1,963Missed or underpaid
- Filing Deadline$1,963Filing deadline
Safe harbor
Meeting any one rule avoids the penalty.
- 90% of Current Year TaxNot met
Pay at least 90% of your 2026 tax liability
Required $28,800Paid $8,000Short $20,800
- 110% of Prior Year TaxNot met
Pay at least 110% of your 2025 tax liability (110% because AGI > $150k)
Required $30,800Paid $8,000Short $22,800
- Owe Less Than $1,000Not met
Owe less than $1,000 after subtracting withholding and credits
Required $31,000Paid $8,000Short $23,001
Closest rule
$20,800 more would have met the “90% of Current Year Tax” rule and avoided the penalty.
Planning note
Splitting payments evenly across the four quarters would have cut the penalty by about $1,963.
An estimate for education, not tax advice. IRS penalties depend on your circumstances, including waivers and reasonable-cause relief, and the interest rate can change each quarter.
Method
How the estimate works.
How underpayment penalties work
US tax is pay-as-you-go. If you’re self-employed or have income without withholding, you make quarterly estimated payments; miss them and the IRS charges an underpayment penalty.
The penalty works like interest on the amount you underpaid, from each quarterly due date until you pay. The calculator uses 7% a year (the federal short-term rate plus 3%). The IRS sets the rate each quarter (7% for October–December 2026).
The three safe harbor rules
Meeting any one of these avoids the underpayment penalty:
- Pay 90% of this year’s tax. Withholding plus estimates of at least 90% of your current year liability.
- Pay 100% of last year’s tax (110% at higher income). If last year’s AGI was over $150,000, you need 110%.
- Owe less than $1,000. After withholding and credits, no penalty applies, whenever you paid.
Late payment against late filing
- Late payment: 0.5% a month on the unpaid balance, up to 25%
- Late filing: 5% a month on the unpaid balance, up to 25%
File on time even if you can’t pay: the late filing penalty is 10 times the late payment penalty. File, then set up a payment plan with the IRS.
FAQ
IRS penalty questions.
What is the IRS underpayment penalty?
The IRS underpayment penalty applies when you don't pay enough tax throughout the year via withholding or estimated payments. The penalty is calculated using the federal short-term interest rate plus 3%, applied to the amount you underpaid. The IRS sets the rate each quarter (7% for October–December 2026).
What are the three safe harbor rules to avoid penalties?
You can avoid the underpayment penalty if ANY of these are true: (1) You paid at least 90% of your current year tax liability, (2) You paid 100% of your prior year tax liability (110% if your AGI was over $150,000), or (3) You owe less than $1,000 after subtracting withholding and credits.
What's the difference between late payment and late filing penalties?
Late payment penalty is 0.5% per month (max 25%) on unpaid taxes. Late filing penalty is 5% per month (max 25%) — 10 times higher! Always file on time even if you can't pay. The IRS prefers that you file and set up a payment plan rather than not filing at all.
Can IRS penalties be waived?
Yes, the IRS may waive penalties for "reasonable cause" such as natural disasters, serious illness, death of a family member, or inability to obtain records. A CPA can help you file Form 2210 or request penalty abatement by demonstrating reasonable cause.
When are quarterly estimated tax payments due?
Q1: April 15 (for Jan-Mar income), Q2: June 15 (for Apr-May income), Q3: September 15 (for Jun-Aug income), Q4: January 15 of next year (for Sep-Dec income). If the due date falls on a weekend or holiday, the deadline moves to the next business day.
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