Here's what I'd do in your situation - file the extension ASAP, then file all your back tax returns first before filing 2024. I had to do this last year. File Form 4868 for the extension. Then gather up your documents for the prior years and file those returns. Even if you made very little, you should still file. For the years with stock losses, those can actually help you if documented properly since you can carry forward capital losses. Once your prior years are filed, THEN file your 2024 return and request a payment plan. The IRS is usually pretty reasonable if you're making an effort to comply. You can set up a plan online for up to 72 months.

Let me save you some stress - file the extension but don't panic about an audit. The IRS is primarily focused on high-income taxpayers right now, not freelancers who owe $13k. The audit rate for self-employed people making under $100k is extremely low, like less than 0.4%. Just make sure you report all your Upwork income (they issue 1099s that the IRS gets copies of). Filing an extension is totally normal too - millions of people do it every year. As long as you're not hiding income or claiming crazy deductions, your audit risk is minimal.

Make sure you respond to that notice ASAP! I ignored a similar notice thinking I could deal with it later and ended up with a tax lien that destroyed my credit score. It took me years to recover financially. The interest and penalties also keep adding up every month you don't address it.

check if you qualify for first time penalty abatement! if you had a clean tax record before 2021 (filed and paid on time for previous years) you can often get the penalties removed. saved me about $1200 on a tax bill last year. doesn't help with the base tax or interest but still better than nothing.

Something that confused me when I was doing estimated taxes was that the line numbers changed from 2018 to 2019 to 2020. For 2018 returns, total tax was on line 15, for 2019 it was line 16, and for 2020 it's line 24. The IRS keeps reorganizing the 1040 form, so make sure you're looking at the right line for the right year!

Don't forget if you're self-employed, you might also need to look at Schedule SE for the self-employment tax portion of your liability, although that gets rolled into the total tax on line 24 anyway. Self-employment tax can be a nasty surprise the first time you deal with it!

14 I'm not a tax expert, but did you switch jobs in 2024? Sometimes when you start a new job in the middle of the year, the withholding calculations get messed up because the system assumes you'll only make that amount for the full year and withholds at a lower rate. Happened to me when I started a higher-paying job in July - they weren't withholding nearly enough because the payroll system prorated my annual income.

5 Did you check if your employer might have classified too much of your income as non-taxable benefits? Sometimes if you have a lot of pre-tax deductions like health insurance, HSA, dependent care FSA, or retirement contributions, it can significantly reduce your taxable wages, which would result in less withholding. Might be worth checking your paystubs to see if there's anything unusual in how your taxable wages were calculated.

For what it's worth, your situation screams "the company is not reporting these payments to the IRS." Companies that pay contractors properly don't dodge providing 1099s - it's literally a basic business function. Here's what I think is happening: They're either classifying these payments as something else in their books or they're not recording them properly at all. Either way, it likely means they're trying to reduce their tax liability by not properly documenting contractor payments. As others have said, you MUST report your income regardless. I'd strongly recommend keeping documentation of your attempts to get the 1099 from them. Take screenshots of emails or texts where you're requesting the form. This creates a paper trail showing you were trying to comply properly.

One thing nobody's mentioned - if you've been a contractor making that much ($24k) and haven't been making quarterly estimated tax payments, you might have an underpayment penalty coming. Since no taxes are being withheld, you're supposed to be making those quarterly payments yourself. The good news is you can avoid the penalty if you owe less than $1,000 after accounting for any withholding from other jobs, or if you paid at least 90% of this year's tax or 100% of last year's tax (whichever is smaller). Just something to be aware of when filing!