Back taxes: what an old balance has become
Enter what was left unpaid for each year, as shown on the return or on the first bill. The calculator runs every year from its own due date to today and shows the penalty and interest piled onto each one.
- Late payment penalty ceiling
- 25 % after 50 months
- Interest, fourth quarter of 2026
- 7 %
- Collection period
- 10 years from assessment
All years, as of October 20, 2026
$20,595
$6,645 of penalties and interest on $13,950 of tax.
| 2023: tax $6,900 | $9,434 |
| 2022: tax $4,450 | $6,832 |
| 2021: tax $2,600 | $4,329 |
Each year runs from its own due date. An unfiled year can also be filed by the IRS itself (substitute for return), usually with a higher tax. Not tax advice.
| Year | Late filing | Late payment | Interest | Total |
|---|---|---|---|---|
| 2023 | $0 | $1,070 | $1,465 | $9,434 |
| 2022 | $0 | $957 | $1,425 | $6,832 |
| 2021 | $0 | $650 | $1,079 | $4,329 |
Compiled by Radif Partners · How we calculate · rules and rates read on irs.gov · not tax advice, the IRS decides
Back taxes are balances from earlier years that were never paid in full, most often on returns that were filed on time. On those, there is no late filing penalty, but the late payment penalty of 0.5 % a month runs until it reaches 25 % of the tax, after 50 months, and interest keeps compounding daily at each quarter's rate, 7 % in the fourth quarter of 2026. A 2021 balance has already hit the penalty ceiling; a 2023 balance has not. Take $6,900 left from 2023, $4,450 from 2022 and $2,600 from 2021. On October 20, 2026 they total $20,595, against $13,950 of original tax. Each year has its own collection period of 10 years from the date the IRS assessed it, which can be suspended or extended, and the IRS keeps taking refunds until the balance is cleared.
Old balances on returns that were filed
This page is about years where the return went in but the money did not, or not all of it. The unfiled returns page covers the other case. With the return on file, the IRS assessed the tax shown, sent a first bill, and has been adding the late payment penalty month by month and interest day by day ever since. The table counts both for the three example years.
| Year | Tax left unpaid | Months of penalty | Late payment | Interest | Owed today |
|---|---|---|---|---|---|
| 2023 | $6,900 | 31 | $1,070 | $1,465 | $9,434 |
| 2022 | $4,450 | 43 | $957 | $1,425 | $6,832 |
| 2021 | $2,600 | 55 | $650 | $1,079 | $4,329 |
Two older years, returns filed
All years, as of October 20, 2026
$11,869
| 2023: tax $5,200 | $7,110 |
| 2022: tax $3,100 | $4,760 |
The penalty tops out; interest does not
The late payment penalty stops at 25 % of the unpaid tax. At 0.5 % a month, that takes 50 months. For the 2021 example, due April 18, 2022, the ceiling of $650 was reached in June 2026. The 2022 balance gets there in June 2027, the 2023 balance in June 2028. After that point, an old balance grows only through interest, which is charged on the tax, the penalty and the interest already added. Left another twelve months, the 2023 balance alone would go from $9,434 to $10,546.
The rates an old balance went through
Interest on back taxes is not one rate. The underpayment rate is reset each quarter at the federal short-term rate plus three points, and every day of a balance uses the rate of its own quarter. A 2021 balance, due in April 2022, started at the 4 % rate of the second quarter of 2022 and went on to quarters at 8 %, such as the fourth quarter of 2023. The IRS quarterly rates page publishes the full series; the rows below are the underpayment rates the calculator applies.
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2021 | 3 % | 3 % | 3 % | 3 % |
| 2022 | 3 % | 4 % | 5 % | 6 % |
| 2023 | 7 % | 7 % | 7 % | 8 % |
| 2024 | 8 % | 8 % | 8 % | 8 % |
| 2025 | 7 % | 7 % | 7 % | 7 % |
| 2026 | 7 % | 6 % | 7 % | 7 % |
Each year has its own collection clock
The IRS generally has 10 years from the date a tax was assessed to collect it, with the penalties and interest attached, as the IRS page on the collection statute explains. For a return filed on time, assessment comes shortly after processing, so a 2021 balance assessed in 2022 is collectible until about 2032. Each assessment has its own date: an amended return, an audit or a substitute return creates a new one. The date can move. A pending installment agreement request, a pending offer in compromise, a bankruptcy or six months or more living abroad suspend it, and the exact date for each year is on the account transcript.
What the IRS does in the meantime
An old balance does not sit quietly. Each refund for a later year is applied to it, and the IRS can file a notice of federal tax lien or move toward a levy after its final notices; a CP504 is the step where the penalty can rise to 1 % a month. A balance over $66,000 with a lien or levy and nothing arranged can also lead to passport certification.
Checking the real balance of each year
The figures above assume nothing was paid after the due date. Real accounts rarely look like that: a refund was taken one year, a payment went in another, a notice was paid on time and stopped the interest on its amount. The individual online account shows the current amount owed and the payment history, and the account transcript of each year lists every charge, credit and the collection date. The IRS asks for one to three weeks before a recent payment shows, three for payments that are not electronic. Entering the unpaid tax of each year as the transcript shows it, rather than the figure on the original return, brings the calculator much closer to the real total.
Paying several years with one plan
A single installment agreement can cover every year owed, and the eligibility tests use the combined balance: $50,000 or less in tax, penalties and interest for a Simple Payment Plan, with every required return filed. The three example years, at $20,595, fit under that limit. An approved plan with returns that were filed on time also halves the monthly penalty on any year not yet at its ceiling, to 0.25 %. The installment agreement page compares the plan types. All figures here are estimates from the published rates; the balance on your transcript is the one that counts.