IRS Penalties & Interest Calculator — Tax Year 2024

Tax year 2024 represents a preventable stage in the IRS balance lifecycle. While penalties may have started and IRS interest may be compounding, the balance has not yet been shaped by years of accumulated penalties and interest.
How this year develops depends heavily on timing, filing behavior, and payment decisions. Filing delays involving a tax return, estimated tax issues, payroll taxes, or household employment taxes, as well as missed opportunities to set up a payment plan or installment agreement, can cause 2024 balances to grow faster than expected if early action is not taken

IRS interest compounds daily using an established interest formula, meaning interest may be charged on both the original unpaid tax and previously assessed penalties. Interest calculations rely on IRS interest categories and quarterly interest rates that change throughout the tax season.
When penalties continue to accrue monthly and interest on those penalties compounds continuously, balances often increase faster than many taxpayers anticipate. This effect becomes more pronounced when a year remains unresolved and begins forming part of a multi-year unresolved pattern.

An estimate from this IRS Interest Calculator can help clarify how penalties and interest may already be affecting your 2024 balance. Even when enforcement has not begun, unresolved balances generally continue to accrue interest and penalties automatically.Options may include setting up a payment plan or installment agreement using Form 9465, requesting an alternative collection status, such as Currently Not Collectible due to Financial Hardship, or evaluating settlement options, such as an offer in compromise. In some situations, penalty abatement or interest abatement may be available when reasonable cause exists.Requests for penalty relief or first-time penalty abatement are commonly submitted using Form 843. Depending on the taxpayer type and relief sought, financial disclosures may require a Collection Information Statement, such as Form 433-F or Form 433-B.