Question

[93690dc3]

Hello, I am new to Upwork and want to build my profile via connects I earn. I have a quick question. I wanted to check if I will get 1099/taxed even on the amount/connects I use to bid in Upwork? Or it will be only be on the amount get deposited to my bank account? 

Basically, I was not sure if the 1099 is based on the amount paid by my clients to me in my Upwork account vs what I deposit in my bank account...

Thank you!

[penngrp]

Connects are an expense, they have nothing to do with earnings.

[5d835742 · Accepted solution]

Yeah, you can write off the cost as business overhead. 

Think I can write off 10,000 worth of connects?

[patchworksvideo]

If you receive a 1099-K, it will show amounts before expenses (such as Upwork fees, connects, etc.).

Even if you do NOT receive Form 1099-K, you are entirely responsible for properly reporting that income, and it is still subject to tax.

You are also responsible (regardless of whether you receive Form 1099-K) for reporting any reasonable expenses related to your self employment, including connects, the fees that Upwork withholds on your income, and so forth, as an offset to your self employment income.

As always, talk to a tax advisor to be sure.