Is this the exact IRS penalty?

No. It’s a simplified estimate. IRS uses daily compounding and quarterly rates.

Does this consider safe harbor rules?

No. It assumes an underpayment exists. Check safe harbor and annualized methods separately.

Should I use this for filing?

No. Use IRS Form 2210 or tax software for exact penalties.

Can I change the rate mid-period?

Not here. Enter an average effective rate if rates changed during the period.

No. It’s an estimate. Consult a tax professional for filing.

finance calculator

Underpayment Penalty Calculator

Estimate IRS underpayment interest on estimated tax shortfalls using a simple daily rate.

Results

Estimated interest penalty: $99
Total underpayment + interest: $5,099

How to use this calculator

Enter the underpaid tax amount.
Enter days the amount was underpaid.
Enter the IRS annual underpayment rate.
Review estimated interest penalty and total due.

Inputs explained

Underpaid amount: Tax shortfall subject to underpayment interest.
Days underpaid: Number of days the balance was outstanding.
Interest rate: IRS underpayment annual rate; changes quarterly. Enter the applicable rate.

How it works

Interest penalty ≈ Underpaid amount × (Annual rate ÷ 365) × Days underpaid.

Formula

Penalty ≈ Underpaid × (Annual rate ÷ 365) × Days

When to use it

Estimating potential penalty for late/insufficient estimated payments.
Planning catch-up payments to minimize interest.
Sanity-checking IRS Form 2210 calculations (approximation only).

Tips & cautions

IRS rates change quarterly; use the current rate for the period.
This is a simple approximation; actual penalties can use daily compounding and period-specific rates.
Paying sooner reduces days underpaid and interest.
Approximation only; IRS uses period rates and daily compounding.
Does not account for safe harbor/annualized methods or withholding timing.
Not a substitute for Form 2210; informational only.

Worked examples

$5,000 underpaid for 90 days at 8%

Penalty ≈ 5000 × (0.08/365) × 90 ≈ $98.63
Total ≈ $5,098.63

$10,000 underpaid for 45 days at 7%

Penalty ≈ 10000 × (0.07/365) × 45 ≈ $86.30
Total ≈ $10,086.30

Deep dive

Estimate IRS underpayment penalty interest by entering the underpaid amount, days underpaid, and annual rate.

Use it to gauge potential penalties for late or insufficient estimated tax payments.

FAQs

Is this the exact IRS penalty?: No. It’s a simplified estimate. IRS uses daily compounding and quarterly rates.
Does this consider safe harbor rules?: No. It assumes an underpayment exists. Check safe harbor and annualized methods separately.
Should I use this for filing?: No. Use IRS Form 2210 or tax software for exact penalties.
Can I change the rate mid-period?: Not here. Enter an average effective rate if rates changed during the period.
Is this tax advice?: No. It’s an estimate. Consult a tax professional for filing.

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Approximate underpayment interest only. IRS applies daily compounding and quarterly rates; use Form 2210 or professional software for exact penalties.