Tax Dictionary – Accrue

IRS Definition

If an unpaid balance remains on your account, interest (and any applicable penalties) will continue to accrue until the account is full paid.

More from H&R Block

Penalties and interest accrue (grow) over time. As long as you have a tax bill that you haven’t paid, interest and penalties will accrue on the balance.

For example:

  • Interest is 4% a year, and your tax balance is $10,000. The interest for Month 1 is $33, so your unpaid balance is now $10,033.
  • For Month 2, interest is calculated on $10,033, so the interest is $33.11, and the new balance is $10,066.11, and so on.

Accruals add up quickly, so it’s best to pay as much as you can, as fast as you can to reduce the penalties and interest that you will pay.

Learn what to do if you can’t pay your taxes.

Related Topics

Related Resources

IRS Letter 3340C – Audit Reconsideration Denial Letter

Your request for audit reconsideration was partially or fully disallowed. Learn how to address letter 3340C with help from the tax experts at H&R Block.

Tax Dictionary – Substitute for Return (SFR)

If you don't file a required tax return, the IRS may prepare a substitute for return (SFR) for you. Read the IRS definition and more from H&R Block.

IRS Notice CP21H – Changes to Your Shared Responsibility Payment (SRP)

The IRS changed your shared responsibility payment. Learn more about notice CP21H and how to handle it with help from the tax experts at H&R Block.

IRS Letter 6001 – Advanced Premium Tax Credit Recipients Non-Filer Letter

The IRS is requesting your return. Learn more about IRS Letter 6001 and how to address it with help from the tax experts at H&R Block.