U.S. Income Tax Filing

[a01e9387]

I started working with Upwork last year, 2021. and have only had one job. I started in July and am still currently working it full time.The Total Billed for 2021 says $19,759 and after Upwork fees, it is $18,221. I am getting ready to file my taxes jointly with my wife who had a part time job, but not with Upwork. How do I file my income since it's my understanding that I want get a 1099 because my income with Upwork didn't reach the threshold in the Upwork guideline. Also, do I use the Total Billed or amount after Upwork fees? I just want to make sure I file correctly because we will also be claiming 1 dependent. As a side note, I always domyown taxes, but haven't run into this issue before. Thanks.

[NikolaS]

Hi Gregory,

If you're a freelancer whom the Internal Revenue Service (IRS) defines as a “U.S. Person” and earn money working with your client through Upwork, you need to report this income on your tax return. However, most freelancers won't receive any tax forms from their contracts on Upwork. Please check this help article for more information.

Please note that this article does not address all the tax issues for freelancers and it cannot and should not be relied upon as legal or tax advice.  Readers are strongly encouraged to seek tax advice based on their particular circumstances from an independent tax advisor. 

[a01e9387]

So, if I understand correctly going by that help article, I want receive any 1099 because the income and transaction limits were not met as per Upwork rules. Also, the Total Billed is my gross income from Upwork/client that I use when filing my tax return and the fees I pay to Upwork "can" possibly be a business expense if I choose to claim them as such, along with any other business expenses. Am I understanding that correctly to the best that you are allowed too tell me? I know you aren't a tax professional and I am just using this as a loose guideline to start. Thanks. 

[researchediting · Accepted solution]

About 1099s: It's not Upwork rules, it's IRS rules. They've changed them twice in the last few years. The bottom line is you don't need a 1099 to file. As a self-employed contractor/small business owner, you file from your own business records.

As of the last time I checked—please confirm with the IRS—your understanding is correct: US self-employed filers have the option of reporting either just their net income, or their gross minus (in Upwork's case) fees and commissions—and minus any other allowed business expenses. Unless you've set up some other legal entity to embody your business—something other than a sole proprietorship/dba—you would do this via the Schedule C.

Personally, I can't imagine forgoing the opportunity to report any and all expenses, not least Upwork's commission.

[cankitgarg]

Hi Michael,

I'm interested in learning US taxation, by working as a few hours a week, as I'm already a full time employee in a company based out of US. Is this something you can help me. 

[wlyonsatl]

Gregpru D.

On my 2020 federal taxes I put my gross Upwork earnings on Schedule C's Line 1,and deducted Upwork's fees on Line 10 and other business expenses on Line 18. I had other deductions on Schedule 1, which were reflcted in my 1040's Lines 9, 10a, 10b and 10c, resulting in my Adjusted Gross Income Line 11.

Good luck!

[iziaulla]

I think it might be a little bit different if you were to file taxes using software like Turbo Tax, like I do every year.  With Turbo tax you have to know specifically what category (or field) to add your income and deductions.  Having a 1099 form just makes things a lot easier to file your taxes.  I wish that there was a way to obtain a 1099 form electronically after logging into my account.  

[a01e9387]

That would be great to be able to get a 1099 electronically. I just estimated my taxes using turbotax, TaxSlayer, h&r block and Free tax USA. The interface on all of them is about the same but the prices differ substantially. I settled on Free tax USA because the interface was highly comparable to the other and the number was very close, but a federal return is free and a state return starts at $14.99.  I use the home office deduction for rent and utilities but did not use the simplified manner but instead used direct. Then, I used the business expense section on schedule C for office supplies and such.

[garyh526]

Is there a place in the reports that shows just my fees and expenses that I can claim for deductions? I see it mixed in with withdrawals I made having the money sent to my bank.