Make your June 16 estimated tax payment to stay ahead, IRS warns

If you earn money outside a regular paycheck—through side gigs, freelance work, rental properties, or capital gains—there’s a date you don’t want to ignore: June 16. It’s the second-quarter estimated tax deadline in the US, and it’s one that quietly trips up even diligent earners.

Here’s what this deadline really means, why it matters for your long-term financial picture, and how to approach it with clarity—so you’re not stuck with surprise penalties or a lopsided tax bill in April 2026.

The US tax system is “pay-as-you-go.” If you don’t have taxes withheld automatically (like employees typically do), you’re expected to make quarterly payments directly to the IRS. These apply to all kinds of non-wage income—think: freelance invoices, investment gains, dividends, rental profits, and even some lump-sum retirement distributions.

While the first-quarter deadline (April 15) is hard to miss due to the buzz around annual tax filing, the June 16 deadline arrives with less fanfare. Yet it’s just as important, especially for those whose income spikes in bursts or fluctuates seasonally. As financial planner Nathan Sebesta notes, the second quarter is when many high earners and business owners forget to factor in income streams that don’t come with tax withheld—such as capital gains or deferred side income.

If you miss the June 16 deadline—or any quarterly deadline—you may owe an underpayment penalty. This isn’t a one-time fee. It accrues daily based on the IRS’s published interest rate (currently 8%) and the amount you should have paid.

The penalty isn’t just a slap on the wrist. For those with sizable earnings, the compounding nature of the interest means the longer you delay, the faster the penalty grows. While employer withholding is treated as evenly distributed throughout the year, estimated payments are judged within fixed deadlines. That’s where the mismatch hurts: late payments don’t get averaged out.

Not everyone has to pay quarterly. But the IRS expects you to do so if:

• You’re likely to owe at least $1,000 in tax for the year, and
• You don’t have enough tax withheld through payroll or other means.

This applies to:

• Sole proprietors and gig workers
• Business owners and S corp shareholders
• Individuals with significant investment income

Corporations have a lower threshold: just $500 in expected tax liability triggers the quarterly requirement.

To avoid the underpayment penalty, the IRS offers a “safe harbor” guideline. You must pay either:

• 90% of your total 2025 tax bill, or
• 100% of your 2024 taxes (110% if your 2024 AGI was $150,000 or more).

This rule helps buffer taxpayers against income fluctuations. Even if you end up owing more next April, following the safe harbor will keep penalties off the table. You’ll find your 2024 AGI on Line 11 of your 2024 Form 1040. Use that as a reference point to estimate how much to remit with each quarterly payment.

Another pitfall? The IRS’s quarterly deadlines don’t align with calendar quarters. Here are the 2025 dates:

• Q1: April 15, 2025
• Q2: June 16, 2025
• Q3: September 15, 2025
• Q4: January 15, 2026

Missing one of these dates—even by a day—can trigger a penalty unless you had no income to report that quarter.

If you’re juggling multiple income streams, here’s how to build a smarter estimated tax strategy:

1. Quarterly Check-ins: Revisit your books at least monthly. Don’t wait until the quarter ends to assess cash flow and income.
2. Auto-Transfers: Set aside a percentage of every payment you receive—often 20% to 30%—into a separate tax savings account.
3. Use Form 1040-ES: The IRS provides payment vouchers and guidance for estimating taxes owed. This form helps you stay on track.
4. Consider Withholding Tweaks: If you also have a salaried job, increasing your W-2 withholding could reduce or eliminate your estimated tax burden.

Don’t panic—but act quickly. The longer you delay, the more the interest adds up. You can still make a payment after June 16 via IRS Direct Pay or through your tax software provider. If this is your first time missing a payment, you may be able to request a penalty abatement for a “first-time offense.” But that’s not guaranteed. Going forward, build estimated taxes into your monthly routine—not just your quarterly calendar.

Making timely estimated payments isn’t just about avoiding penalties. It’s about managing cash flow across the year—so you’re not left scrambling to find a large sum in April.

For anyone building a business, freelancing part-time, or earning significant investment income, quarterly taxes are a core part of long-term budgeting. They affect liquidity, saving targets, and even how confidently you can invest or expand. There’s no glory in scrambling. Predictable systems, even for unpredictable income, are what turn financial chaos into control.

If June 16 snuck up on you this year, let it be a trigger—not a tripwire. Set a reminder, run your numbers, and treat quarterly payments as the cost of building flexible income—not a penalty for it.