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What actions should freelancers take for W2 Tax form

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Active Member
Emily Q Member Since: Oct 20, 2019
1 of 11

Hello,

My question is about W2 form for both client and freelancers.

 

What actions I and freelancers should do in order to work on W2 tax form.
And what kind of papers we are going to receive at the beginning of each project and at tax period.

I read already some articles and couldn't get a clear picture.

Thanks.

 

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Community Guru
Jennifer M Member Since: May 17, 2015
2 of 11

We're 1099 contractors. You only get the 1099 in the mail if you have 250 transactions and make at least $20k. Otherwise, you have to just add up total income and commissions and claim it.

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Active Member
Emily Q Member Since: Oct 20, 2019
3 of 11

What will be next if it was under 1099?
How much is percentage and what actions should client and freelancers do.

 

Also, I've ready that some freelancers they prefer to work under W2 form.

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Community Guru
Jennifer M Member Since: May 17, 2015
4 of 11

Emily Q wrote:

What will be next if it was under 1099?
How much is percentage and what actions should client and freelancers do.

 

Also, I've ready that some freelancers they prefer to work under W2 form.


Not sure what you mean. Clients and freelancers don't have to do anything. We sign a w-9 and Upwork reports what we made. It's our responsibility to file with the IRS. Tax forms don't come into play when we work with clients. 

 

Freelancers who prefer w-2 income are called "employees."

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Active Member
Emily Q Member Since: Oct 20, 2019
5 of 11

I am still a bit confused about the problem.

- Does Upwork file with the IRS per transaction? If not, when do they do that?

- Do freelancers claim the income for each transaction or in bulk?

- When do they have to claim the income and how much percentage of the income will the tax be?
 

Thanks.

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Moderator
Avery O Moderator Member Since: Nov 23, 2015
6 of 11

Hi Emily, 


You may read up on the help articles here for more information about taxes. On this link, you can access the recording of our webinar "Getting 'Tax Wise'," in case you missed it.

It would be best to consult with a local advisor if you have further questions about filing your taxes as a freelancer. 


-Avery
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Community Guru
Brian F Member Since: Jun 4, 2013
7 of 11

Per the California Assembly Bill 5 rationalte and many others to follow (https://www.natlawreview.com/article/california-supreme-court-to-decide-dynamex-retroactivity) Upwork has been misleadingly and incorretcly classifying many of its workers as independnent contractors.  Because of the level of control and involvement Upwork exerts over its workers, most do not fir the definition of "independent contractors" legally and this is what multiple court rulings have found.  It is likely only a matter of time before all states or the federal government forces Upwork's compliance in this matter.  Since Upwork is not cooperative in this and seeks to pass on payroll taxes to its de factor employees, IRS Form 4852 seems like an option to delcare your income as W2 even if Upwork will not. https://www.irs.gov/pub/irs-pdf/f4852.pdf

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Community Guru
Wes C Member Since: May 3, 2019
8 of 11

Um, no.

 

Upwork doesn't maintain any control over its freelancers. It allows clients to post jobs, handles the contract paperwork, and facilitates the payment flow. That's it.

 

Freelancers choose which jobs to bid on, which offers from clients (not Upwork) to accept, how much to charge, what hours to work, what tools to use, and whether they bother to get dressed to go to work. None of that is under Upwork's control. 

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Community Guru
Brian F Member Since: Jun 4, 2013
9 of 11

Wes C wrote:

Um, no.

 

Upwork doesn't maintain any control over its freelancers. It allows clients to post jobs, handles the contract paperwork, and facilitates the payment flow. That's it.

 

Freelancers choose which jobs to bid on, which offers from clients (not Upwork) to accept, how much to charge, what hours to work, what tools to use, and whether they bother to get dressed to go to work. None of that is under Upwork's control. 


Incorrect under the general ABC standards as ruled by the courts in California.

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Moderator
Valeria K Moderator Member Since: Mar 6, 2014
10 of 11

Hi Brian,

 

Thanks for your post. Our classification compliance services are supported by our award-winning, in-house legal team and outside legal experts from across the globe, and we apply an assessment of the factors in the laws based on the freelancer’s location. Here’s an article describing some of the factors considered and the classification process  (note that this article is not specific to California).

 

In some cases, clients will have to look at whether the worker is an employee under the new standard.  In cases where their freelancer should be classified as an employee, clients can leverage Upwork Payroll and other tools to ensure they can start or continue engagements with freelancers within the bounds of California law.

~ Valeria
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