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IRS Warns Taxpayers: Avoid ‘Falling Behind’ by Meeting June 16 Deadline for Second-Quarter Estimated Tax Payment
The IRS reminds taxpayers to make their second-quarter estimated tax payments by June 16, 2025, to avoid penalties and interest. This timely payment is critical for individuals and businesses with income streams not subject to withholding, including self-employment, rental income, dividends, and gig economy earnings.
Understanding Estimated Tax Payments: Who Needs to Pay and Why
Estimated tax payments are essential under the U.S. “pay-as-you-go” system, where taxpayers must remit taxes as income is earned. Individuals such as freelancers, contractors, small business owners, and investors receiving interest or dividends must estimate and pay taxes quarterly. The IRS requires payments when you expect to owe at least $1,000 in taxes for the year, or $500 for corporations.
According to Nathan Sebesta, CFP®, clients frequently overlook taxable income from capital gains or side ventures not subject to withholding. This oversight can result in substantial penalties if quarterly deadlines are missed.
The IRS Safe Harbor: Avoiding Underpayment Penalties
Taxpayers can protect themselves from underpayment penalties by meeting the IRS safe harbor rules:
- Pay at least 90% of your 2025 tax liability, or
- Pay 100% of your 2024 tax bill (110% if your adjusted gross income was $150,000 or more in 2024).
These thresholds prevent penalties but do not eliminate the obligation to pay any remaining tax balance by the filing deadline.
Laurette Dearden, CPA and Director of Wealth Management, emphasizes the risk of penalties due to missed deadlines inherent in quarterly payments — unlike employer withholding, which spreads tax payments evenly over the year.
Quarterly Deadlines to Remember in 2025
- Q1: April 15
- Q2: June 16
- Q3: September 15
- Q4: January 15, 2026
The IRS cautions that these dates often catch taxpayers off-guard, especially those with irregular or seasonal income flows.
Strategic Recommendations for Multinational Businesses and High-Net-Worth Individuals
For multinational corporations and high-net-worth clients, diligent estimated tax planning is paramount. Regular reviews of taxable income, capital gains distributions, and foreign income streams can mitigate the risk of unexpected tax bills and penalties. Consulting specialized tax advisors to navigate complex income sources and IRS regulations is advised.
Meeting the June 16 estimated tax payment deadline is a critical step in maintaining tax compliance and avoiding costly underpayment penalties. Taxpayers with complex income sources or fluctuating earnings should prioritize accurate quarterly estimates to stay ahead of their tax obligations.
Understanding Estimated Tax Payments: Who Needs to Pay and Why
Estimated tax payments are essential under the U.S. “pay-as-you-go” system, where taxpayers must remit taxes as income is earned. Individuals such as freelancers, contractors, small business owners, and investors receiving interest or dividends must estimate and pay taxes quarterly. The IRS requires payments when you expect to owe at least $1,000 in taxes for the year, or $500 for corporations.
The IRS Safe Harbor: Avoiding Underpayment Penalties
Taxpayers can protect themselves from underpayment penalties by meeting the IRS safe harbor rules:
- Pay at least 90% of your 2025 tax liability, or
- Pay 100% of your 2024 tax bill (110% if your adjusted gross income was $150,000 or more in 2024).
These thresholds prevent penalties but do not eliminate the obligation to pay any remaining tax balance by the filing deadline.
Laurette Dearden, CPA and Director of Wealth Management, emphasizes the risk of penalties due to missed deadlines inherent in quarterly payments — unlike employer withholding, which spreads tax payments evenly over the year.
Quarterly Deadlines to Remember in 2025
- Q1: April 15
- Q2: June 16
- Q3: September 15
- Q4: January 15, 2026
The IRS cautions that these dates often catch taxpayers off-guard, especially those with irregular or seasonal income flows.
Strategic Recommendations for Multinational Businesses and High-Net-Worth Individuals
For multinational corporations and high-net-worth clients, diligent estimated tax planning is paramount. Regular reviews of taxable income, capital gains distributions, and foreign income streams can mitigate the risk of unexpected tax bills and penalties. Consulting specialized tax advisors to navigate complex income sources and IRS regulations is advised.
Meeting the June 16 estimated tax payment deadline is a critical step in maintaining tax compliance and avoiding costly underpayment penalties. Taxpayers with complex income sources or fluctuating earnings should prioritize accurate quarterly estimates to stay ahead of their tax obligations.
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