Self-Employed Americans Must Pay Taxman by June 15 Deadline: IRS

The Internal Revenue Service (IRS) building in Washington, on March 22, 2013. Susan Walsh/AP Photo

The June 15 due date is fast approaching for filing second-quarter tax returns for American taxpayers like those who are self-employed, failing which they can face penalties.

Quarterly tax payments for this year are due on April 18, 2023, June 15, 2023, Sept. 15, 2023, and Jan. 16, 2024. Quarterly estimated tax payments are usually paid by self-employed workers, retirees, investors, gig workers, businesses, and others who do not have their taxes withheld. Employees who don’t have enough taxes withheld by employers in a year are also expected to pay quarterly estimated taxes. The upcoming second-quarter tax returns are due on June 15.

An individual has to pay quarterly estimated taxes in case they owe at least $1,000 in taxes in the current year after deducting their withholding and refundable credits. Taxpayers who do not make timely tax payments can get penalized and end up paying more than their dues.

“If you’re not sure what your total income is going to be for the current year, simply take your last year’s tax liability and split it into four equal parts and use those for your estimated tax payments,” said Mark Steber, chief tax information officer at Jackson Hewitt Tax Services, according to USA Today. “You may still owe next year when you file, but you won’t owe the underpayment penalty.”

Taxpayers who owe unpaid taxes and missed the April 18 tax deadline for filing their 2022 federal income tax return have been advised by the Internal Revenue Service to pay any dues by June 14 to avoid a bigger late-filing penalty.

“Normally the late-filing penalty for each month—or part of a month that a return is late—is 5 percent of the unpaid tax, up to a maximum of 25 percent. The late-filing penalty will stop accruing once the taxpayer files,” according to a June 9 IRS news update.

“But, by law, if a return is more than 60 days late, the minimum late-filing penalty, also known as a failure to file penalty, is either $435 or 100 percent of the unpaid tax, whichever is less. This means the penalty will equal the tax due if the taxpayer owes $435 or less. If they owe more than $435, the minimum penalty will be $435.”

Tax Payment for Americans Living Abroad

June 15 is also the deadline for paying the 2022 federal income taxes for American taxpayers living and working outside the United States.

“A taxpayer qualifies for the June 15 filing deadline if: both their tax home and abode are outside the United States or Puerto Rico, or they are serving in the military outside the United States and Puerto Rico on the regular due date of their tax return,” according to a May 30 news update by the IRS.

In case taxpayers are unable to meet the June 15 deadline, they can request an automatic six-month extension. Military personnel stationed aboard or in a combat zone during the tax-filing season can be eligible for a 180-day extension to file and pay taxes.

Taxpayers living outside the United States can qualify for tax benefits like the foreign tax credit or the foreign earned income exclusion. They can also qualify for child tax credit and credit for other dependents. The calculation of such credits will depend on whether the taxpayer lived in the United States for more than half of 2022.

The IRS will charg penalties on taxpayers who file their returns late. While the penalty can be avoided by filing for an extension of payment, the taxpayer will still owe interest on late payments.

In January, the IRS announced that interest rates on late payments for individuals will be charged at 7 percent, compounded daily.

Taxpayers who have relinquished their U.S. citizenship or have ceased to be lawful permanent residents of the United States should file for a dual-status alien tax return.