Reporting Income from Upwork

Overview

As a freelancer, you are self-employed and are required to report all of your income to your local tax authorities, including your income from Upwork. The process varies based on your location and individual tax requirements. However, I’m going to guide you on a general note.

How to Report Your Income

Income earned through Upwork should be reported as self-employment income. Here are some general steps:

• Collect Your Earnings Statements: The first step is to collect and accurately record all the income you have received from Upwork. This can be done by regularly checking your ‘Transactions’ page on Upwork and maintaining the records for each payment you receive.
• Form 1099 (for US freelancers): If you have earned more than $600 within a year, Upwork will send you a Form 1099 which states how much you have earned in that year. Use this form to report your Upwork income when filing your taxes. Note that, Upwork will not withhold any tax fee from your funds, so you’re responsible for saving a portion of your earnings for taxes.
• Form W8-BEN (for Non-US freelancers): As a non-US freelancer, you should have completed a Form W8-BEN on Upwork which is used to claim tax treaty benefits and certify that you are not a U.S. person. Your earnings on Upwork are subject to the tax laws of your own country.

Tracking your Expenses

Remember, as a freelancer you can also expense certain costs associated with your work. This could include a proportion of your home internet bill if you use it to work, costs of purchasing equipment like laptops, or expenses for training and seminars.

Always ensure you get clear information on the tax process from a registered tax professional or consultant to avoid running afoul of tax laws in your country. Taxes can be complicated; therefore, having a professional guide will be beneficial.