First year doing gig work - how much should I pay in Q4 estimated taxes?

This is my first full year doing Uber and DoorDash. Made about $42,000 total (after gas and expenses, net is probably $30K).

I haven't paid ANY quarterly taxes because I didn't know I was supposed to. Q4 payment is due January 15. How much should I pay to avoid penalties?

Also - do I calculate based on gross ($42K) or net after expenses ($30K)?

You calculate based on NET income after deducting business expenses. So $30K net.

What you'll owe for 2025:

• Self-employment tax: ~$4,200 (15.3% of $30K less the 50% SE tax deduction)
• Federal income tax: ~$1,800 (varies by filing status)
• California state tax: ~$900
• Total: ~$6,900

Since you haven't paid any quarterly estimates, pay at least $6,000-7,000 by January 15 to minimize penalties. The IRS charges penalties for underpayment throughout the year, but paying Q4 is better than waiting until April.

Use a gig worker tax calculator to get your exact quarterly obligation for 2025 and set aside money each month.

$7,000?! I don't have that saved up. What happens if I can only pay like $3,000 now?

Pay whatever you can now, then pay the rest when you file in April. You'll owe penalties but they're not terrible - usually around 5-8% annually on the underpaid amount.

For 2025, set aside 25-30% of EVERY payment immediately. Open a separate savings account for taxes and don't touch it.

Also track ALL deductions:

• Mileage (67 cents per mile in 2024)
• Phone bill (business %)
• Car washes
• Parking fees
• Tolls
• Supplies

These save you thousands.

UPDATE: Paid $3,500 for Q4 via IRS Direct Pay. Will pay the rest in April.

Also went through my Uber and DoorDash records - I drove 28,000 miles this year! At 67 cents/mile that's $18,760 in deductions. My net income is way lower than I thought.

Might actually get a refund instead of owing more. Lesson learned - track EVERYTHING.