Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Estimated monthly payment
$385
Total you will pay
$13,872
Interest charged
$1,295
Failure-to-pay penalty
$555
Cost above the tax owed
15.6%
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How to use this
- 1Enter tax balance owed ($).
- 2Enter months to pay it off (months).
- 3Enter irs interest rate (annual) (%).
- 4Enter setup fee.
- 5Read your estimated monthly payment on the right — it updates as you type.
- 6Hit Share to keep the scenario or send it to someone.
About this calculator
An IRS installment agreement stops collection pressure, but the balance keeps accruing interest and a reduced failure-to-pay penalty for every month it stays open. This calculator shows what a plan really costs: the setup fee, the monthly payment needed to clear the balance in your chosen number of months, and the interest and penalty stacked on top along the way. The IRS charges interest at the federal short-term rate plus 3 percentage points, adjusted quarterly, and a failure-to-pay penalty of 0.25% per month while an approved installment agreement is in effect (0.5% without one), capped at 25% of the unpaid tax. Setup fees in 2026 run about $22 for an online direct-debit plan, $69 online without direct debit, and $178 when arranged by phone or mail, with waivers for low-income filers. Use the result to compare a plan against paying with savings or a lower-rate loan — for many taxpayers the IRS is cheaper than a credit card but more expensive than a home equity line.
Worked example
Using the values the calculator loads with:
Inputs
- Tax balance owed: 12000 $
- Months to pay it off: 36 months
- IRS interest rate (annual): 7 %
- Setup fee: $22 — online, direct debit
Results
- Estimated monthly payment: $385
- Total you will pay: $13,872
- Interest charged: $1,295
- Failure-to-pay penalty: $555
- Cost above the tax owed: 15.6%
What each field means
Inputs
- Tax balance owed ($)
- The tax balance owed used in the calculation, measured in $. Starts at 12000 $ so you have a working example on load. Accepted range: 100–500000 $.
- Months to pay it off (months)
- The months to pay it off used in the calculation, measured in months. Starts at 36 months so you have a working example on load. Accepted range: 2–72 months.
- IRS interest rate (annual) (%)
- The irs interest rate (annual) used in the calculation, measured in %. Starts at 7 % so you have a working example on load. Accepted range: 0–15 %.
- Setup fee
- Pick the option that matches your situation — the maths changes per option. Choices: Waived — low income, $22 — online, direct debit, $69 — online, no direct debit, $178 — by phone or mail.
Results
- Estimated monthly payment
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total you will pay
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Interest charged
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Failure-to-pay penalty
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Cost above the tax owed
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Does an installment agreement stop penalties?
It halves the failure-to-pay penalty from 0.5% to 0.25% per month, but does not stop it or the interest. Both continue until the balance is zero, which is why shorter plans cost far less overall.
Can I get the setup fee waived?
Taxpayers at or below 250% of the federal poverty line can qualify for a waived or reimbursed fee, and direct-debit online plans always cost the least. Select the waived option to model that.
Is a credit card cheaper?
Rarely. Card APRs of 20%+ plus a payment processing fee of roughly 1.8-2% beat the IRS's single-digit interest only in unusual cases. A home equity line or credit union personal loan is more often the cheaper route.
Are these exact IRS figures?
The interest rate is set quarterly and defaults here to a recent typical level — check the current rate and adjust the input. Penalty mechanics and fee tiers follow published IRS rules but this is an estimate, not tax advice.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). IRS Payment Plan Cost Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/irs-installment-agreement-calculator
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/irs-installment-agreement-calculator" target="_blank" rel="noopener">IRS Payment Plan Cost Calculator — RevenueLab</a> (2026).</p>
Source: [IRS Payment Plan Cost Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/irs-installment-agreement-calculator) (2026).