IRS wants you to make payment by this date to avoid penalties: Who qualifies for tax relief and other benefits?
The Internal Revenue Service (IRS) notified all taxpayers to file their second-quarter taxes by June 16 to avoid facing the risk of penalties. 'Taxpayers that receive income not subject to withholding, such as income from self-employment, gig work, interest, dividends, capital gains, rent or 1099 earnings, may need to make estimated tax payments throughout the year. This includes freelancers, retirees, investors, businesses, and corporations,' said a news release on the official website.
Those who fail to pay by the deadlines for this financial year (April 15, June 16, September 15, and January 15 of next year) will face interest-based penalties which compound daily. To avoid facing underpayment penalties, the IRS provided some safety thresholds:
• Pay 90% of your 2025 total tax liability
• Pay 100% of your 2024 total tax (if income was under $150,000)
• Pay 110% of your 2024 total tax (if income was above $150,000)
For those who failed to meet the deadline, the recently introduced IRS Fresh Start Program can provide alternate opportunities.
For those who are already flailing on their tax payments, the IRS Fresh Start Program provides a safe mechanism to obtain potential relief through a settlement but only if the beneficiary is able to satisfy the extensive documentation and information requirements.
An applicant is required to provide income verification (pay stubs, profit & loss statements, Social Security, or pension income), asset summary (all property, vehicles, bank accounts, and retirement funds), and expense breakdown (detailed monthly expenses including rent, food, insurance, and utilities). The IRS uses this information to calculate your Reasonable Collection Potential, in other words, what it deems you capable of paying.
Lack of transparency in the application process can lead to disqualification of your appeal. Hence, it's important for those applying to take a thorough look at all that's required to be eligible for the program.
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