As a freelancer, you’re responsible for paying your own taxes. This includes federal, state, and local income taxes, as well as self-employment taxes.
While it’s true that you may not have to pay taxes on every gig you complete through UpWork, it’s important to understand your tax obligations as a freelancer. Depending on the type of work you do and the amount of money you earn, you may be required to pay taxes on your UpWork earnings.
For example, if you’re a US citizen or resident alien, you must pay federal income tax on all of your earnings, regardless of where they come from. This includes money earned from UpWork gigs.
If you earn more than $400 through UpWork in a year, you’ll also need to pay self-employment tax (Social Security and Medicare taxes) on your earnings.
State and local income taxes may also apply to your UpWork earnings, depending on the state or locality in which you live. For example, California requires freelancers to pay state income tax on all earnings, regardless of where they come from.
New York State imposes income tax on freelance earnings over $5,000 per year. And in some states, like Texas, there is no state income tax at all.
Do You Have to Pay Taxes for UpWork?
Based on the information above, it is clear that you may have to pay taxes for UpWork earnings, depending on your citizenship, residence status, the type of work completed through UpWork, and the amount of money earned. It is important to understand your tax obligations as a freelancer in order to avoid any penalties or interest charges from the IRS.
