Failure to File: This is the worst penalty you can be responsible for as it is calculated to be 20% of the taxes owed. The way to avoid this penalty is to file by the deadline (April 18th), or file an extension to avoid this penalty. Clients who are due a refund are not impacted by this penalty. Failure to Pay: Even if you file your tax return on time, you will be responsible for failure to pay penalties if the full amount of tax owed has not been paid by April 18th. This penalty is calculated at one half of one percent of the tax owed computed monthly. You will owe this penalty in addition to interest which will also be added to any balance owed as of April 18th. You owe these amounts even if you file an extension.