Filed extension but still owed taxes - how much interest will I be charged?

The IRS charges both penalties and interest when you pay late, even if you filed an extension. For the late payment penalty, it's 0.5% of the unpaid taxes per month (or partial month) up to a maximum of 25%. This applies even if you filed an extension because the extension only gives you more time to file, not more time to pay. The interest rate is separate and changes quarterly. Currently, it's around 5% annually, which works out to about 0.42% monthly. This compounds daily though, not just monthly. If you're filing after your extension deadline, you'll also face a late filing penalty which is much steeper - 5% per month up to 25% of unpaid taxes.

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which really saved me when dealing with penalties and interest. I was confused about exactly what I'd end up owing after missing deadlines for both filing and payment. Their system analyzed my specific situation and gave me a precise calculation of what penalties I was facing, instead of the vague estimates I was getting elsewhere. What I found most helpful was how it specifically calculated the exact amounts for both the failure-to-pay penalty (0.5% monthly) AND the interest separately, so I knew exactly what I'd owe. It also helped me understand how to minimize these charges going forward.

Just wanted to update after trying taxr.ai that the other commenter mentioned. My situation was a mess with multiple late payments from self-employment taxes, plus I filed an extension but still missed that deadline too. The breakdown it gave me was eye-opening - turns out I was mentally calculating my penalties all wrong! It showed me that the failure-to-file penalty (5% monthly) and failure-to-pay penalty (0.5% monthly) have different rates but overlap in a specific way. When both apply, the failure-to-file is reduced to 4.5% so the total is 5%. Had no idea about this detail and it saved me from overestimating what I'd owe by quite a bit.

If you're struggling to get clear answers from the IRS about your specific penalty situation, I'd recommend Claimyr (https://claimyr.com). I was in penalty hell last year and spent DAYS trying to get through to an IRS agent. After finding Claimyr, I got through to a real IRS rep in about 15 minutes who walked me through exactly what penalties applied in my case. They have this callback system that basically waits on hold with the IRS for you, then calls when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Totally changed my approach to dealing with tax issues.

I need to eat my words. After posting my skeptical comment yesterday, I decided to try Claimyr just to prove it wouldn't work. Well, I got connected to an actual IRS agent this morning in about 35 minutes. The agent was able to pull up my account and gave me the exact breakdown of what I owed - both the failure-to-pay penalty and the interest accumulation. She even helped me set up a payment plan right there on the phone. The whole thing took maybe 20 minutes once I got connected. After weeks of stress and uncertainty, I finally know exactly where I stand. Never would have gotten through without that service.

Something everyone should know is that you can sometimes get the failure-to-pay penalty waived if you have a good history with the IRS. It's called "First Time Penalty Abatement" and you can qualify if you haven't had penalties in the prior 3 years. You need to specifically ask for this though - they don't automatically give it to you. Just call and request "first time penalty abatement" for reasonable cause. Won't help with the interest, but could save you from the 0.5% monthly penalty.

One thing I learned the hard way - if you're self-employed, these penalties hit even harder because you owe both the employee and employer portions of FICA taxes. My penalty was way higher than I expected because I was calculating based just on income tax, forgetting that my self-employment tax was part of the equation too.

This thread has been really helpful - I'm in a similar situation where I filed an extension but didn't pay on time. One thing I want to add is that if you can't pay the full amount right away, you should still file your return as soon as possible even if you can't pay. The failure-to-file penalty (5% per month) is much steeper than the failure-to-pay penalty (0.5% per month), so filing stops the clock on the bigger penalty even if you still owe money. Also, if you do owe a significant amount, consider setting up an installment agreement with the IRS. Yes, you'll still pay interest and the failure-to-pay penalty, but it's usually much more manageable than trying to come up with a lump sum plus all the accumulated penalties. The setup fee for an installment plan is pretty reasonable compared to what you'd pay in additional penalties if you just let it sit.

I went through almost the exact same situation last year - filed an extension but completely spaced on paying what I owed by the April deadline. The stress was real! Here's what I learned that might help ease your anxiety: First, breathe. Yes, you'll face penalties, but it's not as catastrophic as it feels. The failure-to-pay penalty is 0.5% per month on your unpaid balance, and interest runs about 5% annually (compounded daily). If you file late too, there's an additional failure-to-file penalty of 5% per month, but many people don't realize these penalties are capped - failure-to-pay maxes out at 25% of what you owe, and failure-to-file also caps at 25%. The key thing that saved me money was filing my return immediately even though I couldn't pay the full amount. This stopped the much steeper failure-to-file penalty from continuing to accrue. Then I set up a payment plan with the IRS, which was way easier than I expected. Also, if you have a clean penalty history for the past 3 years, definitely ask for "first time penalty abatement" when you call them. They can waive the failure-to-pay penalty entirely, though you'll still owe the interest. Worth a shot! Don't let this paralyze you - take action now to minimize the damage. You've got this!

Just wanted to jump in here as someone who's been through this exact nightmare! Filed an extension last year but totally blanked on the payment deadline - classic mistake that way too many of us make. Here's what really helped me get through it: First, don't panic about the math being too complicated. The 0.5% monthly failure-to-pay penalty is straightforward, but the interest calculation can get tricky since it compounds daily. What saved my sanity was getting the exact numbers instead of trying to estimate. Second, file your return IMMEDIATELY even if you can't pay. I can't stress this enough - that failure-to-file penalty is 10x worse than the failure-to-pay penalty. Every day you wait is costing you money. Third, the IRS is actually pretty reasonable about payment plans. I was terrified to call them, but the agent I spoke with was helpful and got me set up with a plan that worked for my budget. The setup fee was minimal compared to what I would have paid in additional penalties. Also echoing what others said about first-time penalty abatement - definitely worth asking for if you have a clean record. Even if they only waive part of the penalties, every bit helps. The whole experience taught me that extensions are really just for paperwork, not payments. Expensive lesson learned!

I've been in your exact shoes and completely understand that anxiety! Here's what helped me navigate this mess: The math breakdown: You're looking at 0.5% per month failure-to-pay penalty PLUS interest (currently around 5% annually, compounded daily). If you're filing after your extension deadline, add another 4.5% per month for failure-to-file (they reduce it from 5% to 4.5% when both penalties apply, so total is 5% monthly until you file). The silver lining: These penalties are capped at 25% each, so while it stings, it won't spiral infinitely. My biggest mistake was waiting to file because I couldn't pay - don't do this! File immediately even if you owe money. That 5% monthly failure-to-file penalty is brutal compared to the 0.5% failure-to-pay penalty. Once you file, call the IRS about a payment plan. I was terrified to make that call, but the agent was actually helpful and got me set up quickly. The setup fee is minimal compared to what you save in penalties. Also ask about "first time penalty abatement" if you've had a clean record for 3+ years - they might waive the failure-to-pay penalty entirely. You've got this! It's scary but totally manageable once you take action.

I'm dealing with a very similar situation right now and this thread has been a lifesaver! Just want to add one thing that might help others - if you're using tax software like TurboTax or H&R Block, many of them have penalty calculators built in that can give you a rough estimate of what you'll owe before you file. It's not perfect, but it helped me mentally prepare for the damage and plan out how much I needed to set aside for a payment plan. The unknown was killing me with anxiety, but having even a ballpark figure made it feel more manageable. Also seconding what everyone said about filing immediately even if you can't pay - I finally did this yesterday and honestly felt a huge weight off my shoulders just knowing that 5% monthly penalty stopped ticking up. Now I just need to work up the courage to call about a payment plan!