In the previous example of a $1,000 balance that's a year late, you would owe $30 in interest and $60 in penalties, unless you get it waived. Unlike interest, the late payment penalty can be waived if you can show good cause for not paying on time. The late payment penalty is assessed in addition to interest and is 0.5% of any unpaid tax for each month or partial month it remains unpaid, up to a maximum of 25%. So, if you owe $1,000 and pay a year after the deadline, you'll owe $30 in interest. The IRS's interest rate can vary, and is 3% for underpayments as of the first quarter of 2016. ![]() You will owe interest on any tax not paid by the normal due date, even if you have a legitimate reason for not paying on time - such as being out of the country or some other hardship.
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