Income Reporting on Upwork

Working on Upwork presents a great opportunity to earn income. Like all income-earning methods, it should be properly reported according to your country’s tax laws. In the United States, the IRS does require freelancers to report their income and here’s how it works:

Upwork and IRS Reporting

Upwork is NOT required to send you or the IRS 1099 forms if you’re contracted as a freelancer. This implies that, on its own, the IRS will not be aware of the money you made on Upwork. However, the obligation to report that income on your tax return doesn’t change.

Your Responsibility as a Freelancer

Note that under U.S. tax laws, all income earned is generally reportable, regardless of whether it’s from a (traditional) employer or from freelance work like Upwork.
This is because the IRS classifies freelancers as self-employed and all self-employed income must be reported. Here’s a general step-by-step guide:

• Keep track of your earnings: Consider setting up an accounting system or utilize software designed for freelancers.
• Report your income: You must report your total gross income on the appropriate IRS form, typically a Schedule C or C-EZ in the case of sole proprietors.
• Pay your taxes: As a freelancer, you’re also liable for paying self-employment tax (Medicare and Social Security).

Consequences of Not Reporting

Failure to report your income from your Upwork platform may result in penalties for under-reporting income on your tax return.
It is therefore recommendable to report ALL income to avoid potential audits and penalties from the IRS.

Getting Professional Help

If you’re unsure about your tax obligations or how to properly report your income from Upwork, it’s recommended to seek advice from tax professionals to ensure everything is done correctly.