Specific Tax and W9 and W4 Forms Questions

[javiercampo]

I have questions about specifically what Upwork is about.  Is it only for people who own a business, have a partnership, or other professional fields?  I am not anywhere near those fields, as I am simply individual who does not have a degree or certificate as a graphic designer or as an audio editor, has never had an official job or had filed any taxes.  Can someone please explain to me in detail, because I concerned about whether to continue using Upwork, thank you.

Here is an article by Investopedia.com, and the link is described below:

https://www.investopedia.com/articles/personal-finance/082714/purpose-w9-form.asp

Employee or Independent Contractor?

If you’re an employee, your employer will withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on your wages. If you’re an independent contractor, it won’t. That means you’ll be responsible for the employer’s share of Social Security and Medicare taxes, and that you won’t be eligible for unemployment compensation if you are laid off.

An unscrupulous or financially struggling employer might try to classify an employee as an independent contractor to save money. If you’re classified as an independent contractor, your employer’s tax “savings” will come out of your pocket as self-employment tax. You’ll also become responsible for calculating and paying your own estimated taxes four times a year and filling out Schedule C when you file your annual tax return.

It isn’t always clear whether a worker is an employee or independent contractor, but in general the more control the business has over what workers do and how they do it, the more likely it is that they are employees. If your Spidey sense starts tingling when someone who hired you calls you an independent contractor, that’s a good sign you should investigate the situation further. Start by reviewing the IRS discussion of the difference between the two. If you’re an employee, you should fill out Form W-4, not Form W-9.

Here’s an example of when an employer could legitimately change your status from employee to independent contractor. You’re a computer programmer and you’re required to come into the office from 9 a.m. to 6 p.m., Monday through Friday. The company provides your desk and your computer.

Starting next month you will be required to provide your own computer. You will be able to work from home or whatever remote location you want, and you can complete the work during any hours you want, as long as your assignments are completed on schedule and you respond to work-related phone calls and emails in a timely manner.

So, can I still do the W-4 form? I do not see it as an available option, thank you.

[abinadab-agbo]

Hey brate!

On Upwork, except you are specifically under Upwork payroll, you're an independent contractor. Simples. It's irrelevant whether you went to college or got a cert, or not.

[javiercampo]

Hi Abinadab,

Does that mean that if I am under "Upwork Payroll", am I allowed to agree with any client any time on me being considered an employee? I say this because the help article says:

W-2 Exceptions
Employees paid through Upwork Payroll
If you and your client agreed that you are an employee, you must be hired through Upwork Payroll. When you use the Upwork Payroll service, our staffing provider will be the employer, handle all of the withholding and payment of taxes, and provide a Form W-2.

Sorry, I forgot to copy the help article link again, but you can view it from the reply I gave to the moderator, I don't recall her name, I apologize.

[mwiggenhorn]

It is extremely rare to be hired through Upwork Payroll.  Don't even worry about it.  You will be an independent contractor in pretty much every time.

[JoanneP]

Hi Javier,

All freelancers who are U.S persons should file a Form W-9 with Upwork. If you need more information about reporting your income tax from Upwork, please check this help article. If you have other questions, please let us know. Thanks!

[javiercampo]

Hi again, I just want to be clear if I should still fill out the W-9 form, or is it better to get hired through Upwork Payroll.  Also, am I already under "Upwork Payroll" as default?  I ask this because the community leader said that I am already under it, so I am confused.

Next, a section on the help article says:

W-2 Exceptions
Employees paid through Upwork Payroll
If you and your client agreed that you are an employee, you must be hired through Upwork Payroll. When you use the Upwork Payroll service, our staffing provider will be the employer, handle all of the withholding and payment of taxes, and provide a Form W-2.

Does this mean I can agree with any client on me being considered as an employee? or is there a limit and/or any rules that I have not yet seen? Thank you

https://support.upwork.com/hc/en-us/articles/211063958-Report-Income-from-Upwork