Got hit with $18K tax bill from Upwork 1099 income - should I have been paying quarterly?

Just filed my 2024 taxes and I'm in shock. I made $75,000 on Upwork last year (my first year freelancing full-time) and I owe $18,000 in taxes plus $800 in penalties.

I had NO IDEA I was supposed to pay taxes quarterly. I thought freelancers just filed once a year like W-2 employees. Now I'm scrambling to come up with $18K.

Questions:

• How much should I have been paying quarterly?
• Can I negotiate the penalties since this was my first year?
• What deductions am I allowed to take to reduce this?
• How do I calculate quarterly payments for 2024 so this doesn't happen again?

Feeling really stupid right now. Why doesn't Upwork warn people about this?

Definitely hire a CPA for a review, especially since you're within the amendment window. The SEP IRA suggestion is excellent.

For quarterly estimates in 2024, here's the schedule:

• Q1 (Jan-Mar income): Due April 15
• Q2 (Apr-May income): Due June 15
• Q3 (Jun-Aug income): Due September 15
• Q4 (Sep-Dec income): Due January 15, 2024

Calculate 25-30% of your net income after expenses each quarter and pay via IRS Direct Pay or EFTPS.

Thank you SO much for this thread. I just started freelancing on Upwork in January and had no idea about quarterly taxes. Just set up a seperate savings account and starting transfering 30% of every payment like DigitalMarketer_Pro suggested.

Also found the upwork tax calculator super helpful for estimating what I'll owe. Wish Upwork made this more obvious during onboarding tbh

Quick question - does the SEP IRA contribution deadline apply if I file for an extension? My accountant mentioned I could have until October to contribute for 2024 if I extend. Is that right?

Also curious if anyone here has compared Solo 401k vs SEP IRA? Trying to figure out which makes more sense for someone making ~$80k on Upwork.