Only 38% of freelancers make quarterly tax payments to the US Internal Revenue Service, according to a new survey by TaxAct. The IRS requires quarterly tax payments from self-employed individuals, and TaxAct reported the penalty for not filing returns and paying taxes owed can be up to 5% of an unpaid tax bill each month.

“The research clearly shows that the majority of freelancers are in greater need of financial guidance than members of the workforce with more traditional income,” said Jenna Ivanoski, gig economy product manager for TaxAct. “Given the unstable financial situation for most freelancers, quarterly tax penalties can really add up, and even put their very financial security at risk.”

TaxAct’s survey took place in January and included a sample of 502 adults who self-identified as being a freelancer, sole proprietor or small business owner from the US.

The survey also found that 63% of freelancers feel they are “unstable” or “just getting by” financially, and only 43% are confident about their overall financial future.

Other findings in the report included:

• Consultants and web/software developers are more likely to make quarterly payments to the IRS.
• Freelancers who are homeowners tend to earn a higher income, and are more likely to be in cohabitating relationships.
• Consultants and web/software developers earn a higher income from their primary income sources, while writers and bloggers earn less.

TaxAct’s report comes just after the US Bureau of Labor Statistics last week released its first estimate of the contingent workforce in 12 years. Independent contractors represented 6.9% of total employment in the US in May 2017, the month under measure, which was down from 7.4% in February 2005, the previous month under measure, according to the BLS.

Other estimates of independent contractors differed from the BLS figures of last week, and indicated a greater number of independent contractors. Experts pointed to differences in how the agency measures independent contractors.

One concern was the BLS data only covered those for whom contingent work is their primary job. Questions have arisen over those who use contingent work, including working as independent contractors, to supplement income from other sources.

US Sen. Mark Warner, D-Va., brought this point up — regarding those who work on a contingent basis to supplement their incomes — in comments last week on the BLS numbers.

“Without this crucial piece of data, it will be tough for us to make an accurate assessment of the best way to help this dynamic segment of workers receive more training and resources, access a system of portable benefits they can carry from job to job, and file their taxes and claim deductions and credits,” Warner said in a statement. “I will continue pushing the federal government and outside experts to fill in these gaps and provide a full picture of this part of our workforce, and expect to seek more information on the tax challenges of these workers in the near future.”