How to Calculate Federal Tax Return Late Fees

The Internal Revenue Service charges a late-filing penalty if an individual owes taxes and does not file on time, which is April 15. The penalty is calculated based upon the tax owed, which the IRS will communicate to the individual via mail. The penalty is 5 percent of the tax owed per month. The minimum penalty is $135, or 100 percent of the tax owed, whichever number is smaller.

• 1

  Determine the amount of tax owed. This amount will be located on a statement that the IRS will send via mail. For example, if the individual owes $5,000 in taxes, then write down 5,000.

• 2

  Figure out how much time has passed since the April 15 deadline in months. For example, if the calculation is being made on Aug. 15, then the taxes are four months late. Write the number 4 down.

• 3

  Write down the 5 percent late-filing penalty as a percentage, or 0.05.

• 4

  Multiply 5,000 X 4 X .05 to get 1,000. The late-filing penalty will be $1,000.