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How do taxes work for freelancers

Active Member
Lydia R Member Since: Jul 6, 2017
1 of 14

Hello, 

 

I am new to this whole thing, just graduated college. So I was wondering how taxes for this work. I don’t have a company or anything, I am just working to get some extra cash on the side.

 

Does Upwork take out income tax? or is that something I have to do at the end of the tax season?

Also, do I need to fill out any forms to say I am a freelancer? The w9 asked for a business name so i just put my actual name.

Do I get a w2 from Upwork at the end of the year?

 

I am clueless to any of this. I hardly understand my own taxes from my day job. 

Community Guru
Jennifer M Member Since: May 17, 2015
2 of 14

if you make more than $20k they send you a 1099. You'll have to pay taxes on the income on tax day. There is a lot of info you can read online but no Upwork doesn't take any money out you're responsible for the taxes.

Community Guru
Preston H Member Since: Nov 24, 2014
3 of 14

You can try NOT paying the taxes owed on Upwork earnings, but I don't recommend doing that because you are likely to be caught and then owe interest and penalties to the IRS.

Active Member
Lydia R Member Since: Jul 6, 2017
4 of 14

Thanks, How would you show it on your taxes if you do not have a 1099? do you just use bank statements?

Community Guru
Preston H Member Since: Nov 24, 2014
5 of 14

Don't use bank statements. Use the reports you can generate from within the Upwork Reports menu. You can export complete records of income for the year, showing the fees you pay. That is all you need. If you don't have a 1099 you can file taxes using these reports.

 

For authoritative tax advice, talk to a tax professional or accountant. The only thing you can get here is non-authoritative advice which may or may not apply to your particular situation.

Active Member
Steve L Member Since: Oct 17, 2018
6 of 14

Where can I export these "complete records" because the certificate of earnings isn't helpful and broad.

Community Guru
Jennifer M Member Since: May 17, 2015
7 of 14

@Lydia R wrote:

Thanks, How would you show it on your taxes if you do not have a 1099? do you just use bank statements?


 I use Upwork reports and add it up because that's the amount Upwork will report to the IRS. If I don't get a 1099, I just put it on the extra earned column. As long as you claim it, you're fine. 

 

I did get a check back from them once cuz I made a mistake and paid too much. That was cool. Bank error in your favor. When does that ever happen?

 

 

Active Member
Steve L Member Since: Oct 17, 2018
8 of 14

Do you put down the total amount that was paid to you OR just the amount you earned (not putting down the fees we pay)?

Community Guru
Mary W Member Since: Nov 10, 2014
9 of 14

 Either way.  You can report the gross amount and report the UW fees as a business expense, or you can report the net amount.  Depends on whether you have a lot of business expenses to claim.  If you are in the US, I highly recommend the Turbo Tax version for self-employed and small businesses.  It's rather fool-proof (and the cost is a business expense)

Community Guru
Virginia F Member Since: Feb 15, 2016
10 of 14

There's this website, from the IRS. It's actually quite informative: https://www.irs.gov/

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