Understanding Taxes for Freelancers on Upwork in the US

As a freelancer, it’s essential that you understand how taxes work in order to manage your finances effectively. Whether you’re a U.S. citizen or a non-U.S. citizen, it’s your responsibility to report all your income, including what you earn on Upwork.

How Taxes are Handled for U.S. Freelancers

• Form 1099-K: Upwork will provide a Form 1099-K to freelancers who earn more than $20,000 and have more than 200 transactions in a calendar year. This form is to be used for your tax reporting.
• Form W-9: All U.S. freelancers should submit a completed Form W-9 to Upwork. This form is required to confirm your U.S. taxpayer status.

Please note:

Even if you do not receive a 1099-K, you are still required to report your income to the IRS.

How Taxes are Handled for Non-U.S. Freelancers

If you’re a non-U.S. citizen, Upwork does not withhold taxes or issue any tax forms. Therefore, you are responsible for any tax obligations in your country.

Keep Track of Earnings and Expenses

To correctly report your income and calculate your taxes, it’s important to keep thorough records of your income and business-related expenses. These can include things like equipment, home-office deductions, and even health insurance premiums.

Remember, tax laws can be complex and differ by location, so it may be beneficial to seek guidance from a tax professional for accurate advice tailored to your specific situation.