File Your June 15 Estimated Tax to Avoid IRS Penalties

Key Takeaways

• Calculate your June payment using IRS Form 1040-ES to ensure you cover at least 90% of your current year liability or 100% of last year's tax.
• Submit your payment by the June 17, 2024, deadline to avoid the IRS underpayment penalty, which currently sits at an 8% annual interest rate.
• Use the IRS Direct Pay system for a $0 fee alternative to credit card processors that charge up to 1.87% per transaction.
• Print or save your payment confirmation immediately, as the IRS portal does not always email a receipt for guest payments.

A plumber in Nashville with two vans and a growing residential route forgot his Q2 payment last year. By the time he filed his annual return, the interest and penalties had ballooned to over $1,400, wiping out his entire profit for a week’s worth of service calls. This guide ensures you don't hand over your hard-earned margin to the Treasury just because of a calendar oversight.

What you'll need

• Your 2023 Federal Tax Return (specifically Form 1040 and Schedule SE)
• Year-to-date profit and loss (P&L) statement through May 31
• IRS Form 1040-ES (Estimated Tax for Individuals)
• Your Social Security Number or Individual Taxpayer Identification Number (ITIN)
• Bank account and routing numbers for a no-fee ACH transfer

The Real Cost of Skipping June

Most service-based business owners assume they can just 'catch up' in April. The IRS disagrees. Our tax system is 'pay-as-you-go.' If you wait until the end of the year to settle a $20,000 tax bill, the IRS treats it as if you took a low-interest loan from the government without permission.

The underpayment penalty is calculated based on how much you owed and how late you were. For the first half of 2024, the rate is 8% according to the IRS Newsroom. While 8% might sound manageable, it is non-deductible interest. You are paying that with after-tax dollars, making it one of the most expensive ways to finance your business operations.

Step-by-step Internal Audit and Filing

Step 1: Determine Your Eligibility

Not every solo operator needs to file quarterly. You generally must pay estimated taxes if you expect to owe $1,000 or more when you file your return. This includes self-employment tax and income tax. If you are still working a W-2 job while side-hustling, you might avoid these forms by increasing your workplace withholding via Form W-4.

Review your net earnings from the first five months of the year. If your 'bottom line' profit exceeds $4,000, you likely hit the threshold. A quick look at your Safe Harbor Rule options can simplify this: if you pay 100% of last year's total tax (110% if your AGI was over $150,000), you won't face a penalty regardless of how much you earn this year.

Step 2: Calculate the Q2 Liability

Open the 1040-ES worksheet. You aren't just paying for the months of April and May; you are consolidating your year-to-date outlook. Take your total expected profit for the year and divide by four. If your business is seasonal—like a landscaping company that peaks in May—you may prefer the 'Annualized Income Installment Method' found in Publication 505.

Don't forget the self-employment tax. This is 15.3% on the first $168,600 of your earnings for 2024. Many owners make the mistake of only calculating income tax and forgetting the Social Security and Medicare portions. This leads to a massive surprise in April and a potential underpayment penalty for the June period.

Step 3: Choose Your Payment Method

You have three main ways to get the money to Uncle Sam. The best for a small shop is IRS Direct Pay. It’s free, requires no registration, and pulls directly from your checking or savings account. You will need a previous year's tax return to verify your identity during the process.

Avoid using credit cards unless you are chasing points and the math works in your favor. Third-party processors like payUSAtax or ACI Payments, Inc. charge fees ranging from 1.82% to 1.87% of the total payment. For a $5,000 tax bill, you’re looking at nearly $95 in fees. Unless your card gives you more than 2% back, you are losing money. Compare current fee structures at the IRS Payments page.

Step 4: Execute the Transfer

Go to the IRS Direct Pay portal. Select 'Estimated Tax' as the reason for payment and '1040-ES' as the form. Pick the current tax year. You’ll be asked to verify your identity using info from a tax return filed in the last few years. Make sure the address you enter matches exactly what was on that specific year’s return.

Once verified, enter the payment amount and the date you want the money to leave your account. Even if you submit the info on June 10, you can schedule the pull for June 17. The IRS considers the payment 'on time' as long as you submit the instruction by the deadline. Review the confirmation screen twice. A typo in your bank account number can lead to a rejected payment and a 'failure to pay' penalty.

Step 5: Document the Transaction for Your Records

The IRS portal provides a confirmation number. Do not just close the browser. Print the page to a PDF and save it in a folder named '2024 Tax Payments.' Your bookkeeper or CPA will need this exact date and amount to reconcile your records at year-end.

If you use software like QuickBooks or Xero, record this as an 'Owner’s Draw' or 'Equity Distribution.' Do not categorize it as a business expense. Federal income taxes are not deductible business expenses, and mislabeling them will throw off your P&L and make your business look less profitable than it actually is to a lender.

Common mistakes to avoid

• Missing the June 15 vs 17 distinction: Since June 15, 2024, falls on a Saturday, the deadline moves to Monday, June 17. Don't wait until the 18th and assume a grace period exists; it doesn't.
• Paying for the wrong year: Ensure you select the 2024 tax year. Selecting 2023 will apply the money to last year's balance, leaving your current year underpaid and triggering a penalty.
• Neglecting state requirements: Most states that have an income tax also require quarterly payments. If you live in a state like California or New York, you likely need to make a separate payment to your state's Department of Revenue by the same deadline.
• Using business names on personal payments: If you are a sole proprietor or a single-member LLC, the payment must be made under your Social Security Number, not your EIN. The IRS tracks 1040-ES payments against individual accounts, not business entities.

When to call a pro

A CPA is worth the investment if your income is fluctuating wildly. If your Q2 was 300% better than your Q1, a professional can help you decide whether to stick to the Safe Harbor amount or pay more now to avoid a giant bill later. You should also consult a pro if you are considering changing your business structure to an S-Corp, as this changes how you handle these payments entirely. For more on that, see our guide on Ditching Self-Employment Tax with an S-Corp Election.

Taking twenty minutes to run these numbers now saves hours of stress next spring. Tax planning isn't about being a math genius; it's about keeping the money you already worked for.

Related free tool

Quarterly Estimated Tax Estimator — Get your per-quarter number in 60 seconds. Free, no signup to start.

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📋 Disclaimer

This article is for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations change frequently, and the information presented may not reflect the most current legal developments. Always consult with a qualified professional (CPA, attorney, financial advisor) before making business decisions based on this content. MyBizNerd may receive compensation through affiliate links, but this never influences our recommendations.

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