Texas resident, US citizen. Im about to get my first upwork pay and I have 3 questions that are tax related:
1. Should I be doing anything to tract these transactions, or will the 1099 upwork gives me have all the info I need.
2. I'm thinking about other freelance jobs too, so would it be a good idea to connect upwork to PayPal? I know if you do that, upwork doesn't track your stuff on their 1099. So would it be a good idea to keep it all in one place?
3. I know I might owe taxes, so how much should I expect to put back per job?
I don't know about the first question but I can guarantee that whatever UpWork tracks is not related to your payment method, I.e. if UpWork is collecting your data on a 1099 then they will have all of your data on there, irrespective of whether you send your earnings to PayPall, your bank account or any other for of withdrawel of funds.
In any case I would suggest that you keep your own record in a spreadsheet, it really isn't hard to do.
Q3, that very much depends on your overal income
I largely agree with this, but note that Upwork DID make one exception for 1099-K reporting - for earnings that they send specifically through PayPal, they do not include earnings withdrawn through PayPal (SOURCE: See FAQ "Why isn’t my income that I withdrew using PayPal showing on my Form 1099-K from Upwork?")
Also note (same source as above) that Upwork fees will NOT be noted on that 1099-K, so to deduct those fees, you must ensure that you keep records of that and get those transaction reports.
That, and it's just good overall to keep your own records. If the IRS ever asks, you want to make sure you're ready. If they're making a determination of whether your activity is a hobby or business, for example, they want to see that you operate like a business.
Taxes - Iwan is totally correct. Taxes depend on earnings. This free tool (as of May 21, 2023) is currently showing 2022 numbers, but it might at least give you SOME idea of expected tax burden - TurboTax - TaxCaster. The IRS has some info about estimated taxes as well. Note that for those who pay estimated taxes, there are FOUR due dates, not just one (and that's just federal - your state may vary).
Also note that if your freelance jobs are in DIFFERENT types of business activity, you may have to file a separate Schedule C and keep separate records for each type of business activity. But if it's all the same type of work, those often can be kept together. For my part, my freelancing is largely all one type of work, so even though clients may pay using different methods (Upwork, checks, PayPal, direct deposit, etc.), it does't really matter too much that these are coming in separately, because in the end, it's pretty easy for me to add everything up at the end when it's tax filing time.
All in all, for best results, talk with an accountant, bookkeeper, tax professional, etc.