If you’re a freelancer, you’re probably used to filing your taxes a little differently than the average person. For example, you likely file as a sole proprietor and have to pay estimated taxes throughout the year, rather than just once a year.
And if you work with clients through online platforms like UpWork, you have to report your earnings in a specific way come tax time. But don’t worry – we’re here to help you figure it all out.
When it comes to reporting your earnings from UpWork on your taxes, there are two things you need to be aware of. First, any payments you receive through UpWork are considered taxable income.
This means that you’ll need to report them on your federal and state tax returns. Second, UpWork is required to send 1099-MISC forms to all U.S.-based freelancers who earn more than $600 in a calendar year. This form will list the total amount of money you earned through UpWork in the previous year.
So how do you actually go about reporting your earnings from UpWork on your taxes? The good news is that it’s pretty straightforward.
You’ll just need to include the total amount of money you earned through UpWork on your 1040 form, under the “Other Income” section. If you’re not sure how to fill out this section of the form, you can always consult with a tax professional or use an online tax filing software.
Once you’ve reported your earnings from UpWork on your taxes, you’ll also need to make sure that you set aside enough money to cover any estimated taxes that may be due. As a sole proprietor, you’re responsible for paying estimated taxes throughout the year – not just once at tax time. This means that you’ll need to put aside money each month to cover your federal and state income taxes, as well as any self-employment taxes that may be due.
If you’re not sure how much money you should be setting aside for estimated taxes, there are a few different methods you can use to figure it out. You can either use the IRS’s Estimated Tax Worksheet or consult with a tax professional. Or, if you’re using an online tax filing software, they may have a tool that can help you estimate your estimated tax liability.
Conclusion:
Based on the information above, it is clear that when it comes time to report your earnings from UpWork on your taxes, there are a few things that need to be taken into consideration. However, overall the process is relatively straightforward and can be easily completed by following the steps laid out above.
