Self-employed Americans who forget the June 16 tax deadline could face hefty IRS penalties as Biden’s agency continues its aggressive collection efforts.
Key Takeaways
- Second quarter estimated tax payments for 2025 must be submitted by June 16 to avoid potential IRS penalties
- This deadline primarily affects self-employed individuals, freelancers, retirees, and investors whose income isn’t subject to regular withholding
- Taxpayers must pay most of their expected tax during the year as income is received, either through withholding or quarterly payments
- To avoid penalties, taxpayers should owe less than $1,000 at tax time or pay at least 90% of expected 2025 tax or 100% of their 2024 tax
- Electronic payment methods are recommended and include IRS Online Account, IRS Direct Pay, and EFTPS
Critical Deadline Approaching for Millions of American Taxpayers
The IRS has issued an urgent reminder for taxpayers regarding the upcoming June 16 deadline for second quarter estimated tax payments for 2025. This deadline is particularly important for self-employed individuals, freelancers, retirees, and investors who earn income that isn’t subject to traditional withholding. These quarterly payments are part of America’s “pay-as-you-go” tax system, which requires taxpayers to pay most of their expected tax liability throughout the year as they earn income, rather than in one lump sum during tax season.
“Estimated tax payments for the second quarter of 2025 are due on Monday, June 16, with taxpayers who fail to pay on time facing underpayment penalties, the Internal Revenue Service (IRS) said in a June 6 statement,” stated (IRS), Internal Revenue Service .
Who Needs to Make These Payments?
Individuals must make estimated tax payments if they expect to owe $1,000 or more when filing their tax return, while corporations face this requirement if they anticipate owing $500 or more. This payment system primarily affects those earning income that isn’t subject to withholding, including self-employed individuals, independent contractors, retirees collecting investment income, and those with significant earnings from rental properties or side businesses. The IRS is particularly focused on those with side hustles, as new reporting requirements may affect taxpayers receiving over $600 electronically.
Entrepreneurs, here’s a reality check:
One missed tax deadline could mean severe penalties, risking not only your money but also your business’s future.
Take note of these important tax deadlines:
🔵 Tax Return Filing Deadlines
→March 15th for LLCs & partnerships.
→April… pic.twitter.com/bnAlwSzbag
— doola (@doolaHQ) November 15, 2024
The changes in reporting requirements represent yet another way the Biden administration is increasing tax enforcement on everyday Americans rather than simplifying our complex tax code. For many hardworking taxpayers running small businesses or side gigs to make ends meet during Biden’s inflation crisis, these quarterly payments represent significant financial planning challenges and increased compliance burdens.
How to Avoid Costly Penalties
The IRS imposes penalties on taxpayers who underpay their estimated taxes throughout the year. To avoid these penalties, taxpayers should ensure they either owe less than $1,000 at tax time or pay at least 90% of their expected 2025 tax or 100% of their 2024 tax (whichever is smaller). Special rules apply to certain groups such as farmers, fishermen, and recent retirees, who may have alternative options for meeting their tax obligations without facing penalties.
“WASHINGTON — The Internal Revenue Service today reminded taxpayers of the 2023 second quarter estimated tax deadline,” stated the Internal Revenue Service.
Taxpayers should be aware that this June 16 deadline is just one of several important tax dates throughout the year. Third quarter payments will be due September 15, and the final estimated tax payment for 2025 is due January 16, 2026. Planning ahead for these payments can help prevent unexpected financial strain and protect hardworking Americans from unnecessary penalties imposed by an increasingly aggressive IRS.
Payment Options Available
The IRS strongly recommends electronic payment methods for estimated tax payments, which include using the IRS Online Account, IRS Direct Pay, or the Electronic Federal Tax Payment System (EFTPS). Corporations are actually required to use electronic funds transfer for federal tax deposits. These electronic options provide immediate confirmation of payment and help ensure timely processing, reducing the risk of penalties for late payments.
“Payment by check or money order made payable to the \”United States Treasury\” is also an option,” stated Internal Revenue Service.
While the IRS continues to push for electronic payments, traditional payment methods remain available for taxpayers who prefer them. This quarterly tax burden highlights how our complex tax system disproportionately impacts small business owners and independent contractors. President Trump’s commitment to tax simplification stands in stark contrast to the current administration’s focus on increased enforcement through an expanded IRS rather than making compliance easier for everyday Americans trying to earn a living.
