Upwork 1099 Tax Form: Filing Requirements and Steps

An Upwork freelancer who receives at least $600 in client payments in 2024 will receive a 1099-K form from Upwork by January 31, 2025. The rule applies to all U.S. taxpayers. If you’re new to Upwork and are still wondering how to pay taxes as an independent contractor working on this platform, this article is for you.

Given that filing taxes and knowing the accounting terms can be challenging, we’re here to help. Although we can’t provide legal or tax advice, we’ll try to clarify the steps and requirements needed to receive and file the form.

Key Takeaways

• All Upwork freelancers who make more than $600 in projects per year (including Upwork fees, refunds, etc.) will receive the 1099-K Form by mail or email. 
• Some states have specific thresholds regarding the form, so it’s best to check the particular requirements for your state. 
• Regardless of the reportable threshold amount, you should report all your income on your tax return.

Table of Contents

Why Is Upwork 1099-K Important?

How to Download a 1099-K Form on Upwork

Upwork 1099-K Requirements

How to Get 1099-K Form From Upwork

Frequently Asked Questions

Why Is Upwork 1099-K Important?

The 1099-K form is used to report payments made to independent contractors in the U.S. to the IRS.  With this form, companies like Upwork  report the gross payments transacted between the client and contractor during a tax year, which is usually a calendar year. A 1099-k will be sent to the IRS only if you earned $600 or more during the year.

As a freelancer working on Upwork, the platform doesn’t withhold any taxes from your income. You may be required to make estimated tax payments during the year to cover income and self-employment taxes. The responsibility for paying taxes falls solely on you as the independent contractor.

The 1099-K form includes all business expenses like shipping, sales taxes, card processing fees, canceled orders, and more.

According to tax laws in the U.S., a company like Upwork you must file the 1099-K form if you earn more than $600 through their platform from January 1 to December 31 of a tax year. This threshold is the total gross amount for all your contracts and transactions.

For example, if you work on 3 contracts and earn $250 for each, you’ll receive the 1099-K from Upwork. The 1099-K represents a record of all payments you receive in a calendar year and doesn’t only refer to the funds you withdraw.

Using accounting terms, the amounts reported on the form are your gross earnings rather than net earnings or net paymentsThey include the Upwork fees you pay, as well as refunds you issue to clients for Upwork payments.

Say that you receive a $25,000 payment from a client. Then, you refund them any amount ($5,000 or $25,000). Upwork will use the total income ($25,000) to report to the IRS.

Also, if one of your contracts is worth $100, and you have $10 (or 10%) for Upwork fees, the whole amount of $100 will be included on your 1099-K.

You need to earn $600 annually with Upwork to receive a 1099-K form. But even if you don’t receive this form, you still must report income you earned.

Current or former employees working for U.S. companies are familiar with W-2 forms. The 1099-K is similar to it, with the exception that it doesn’t list wages for consistent hourly and salary payments. Instead, it includes all transaction sales on Upwork.

This form is also important because it’s needed for filing state taxes. Different states have different sale thresholds. Also, some states need Upwork to report your earnings to them by sending them a copy of the 1099-K form.

Currently, ten states have a minimum payment threshold on the 1099-K:

• Arkansas – $2,500
• Alabama – $1,500
• Missouri – $1,200
• New Jersey – $1,000
• Illinois – $1,000 and four or more transactions
• District of Columbia, Maryland, Mississippi, Massachusetts, Virginia, and Vermont – $600

The rules above only apply to U.S. residents. Foreigners working on Upwork have to submit a Form W-8BEN or W-8BEN-E on the platform. They should also comply with tax laws in their own countries or jurisdictions.

How to Download a 1099-k Form on Upwork

Upwork will mail or email you the 1099-k form if you qualify. You can also follow the easy steps below to get your transaction history:

1. Log into your Upwork account and open the “Reports” tab.
2. Choose “Transaction History” from the new drop-down menu.
3. Under “Statement period,” select a custom date range. It should be set from January 1 to December 31.
4. Press “Download CSV” to get your entire transaction history in the Excel sheet format.

Once you download your yearly income information, you’ll want to find out the total fees and refunds you paid..

You can find the information about your total in the “Billings and Earnings” report on Upwork.

All independent contractors can deduct the fees paid to Upwork from the tax bill. These tax deductions are the reason why you should keep track of your business expenses. 

Even if you work on Upwork part-time, you still should track your expenses that can be deducted from your for the 1099 income. You can simplify expense tracking by using accounting software like FreshBooks. This easy-to-use software makes tracking all your business expenses easy, so you’ll be prepared once the tax season arrives.

The good news is that you can use some of the expenses for tax write-offs. Some tax deductions include:

• Computer equipment
• Home office expenses
• Marketing expenses
• Meals with clients
• Software tools and subscriptions
• Travel expenses
• Upwork service fees
• Education and training expenses

If you have numerous sources of income, it’s always a good idea to hire a tax advisor. You can save money on taxes by working with those professionals. They are trained to look for all tax deductions and tax credits you can use. They are also knowledgeable about the tax laws and will save you time and stress.

In addition, accounting software for freelancers like FreshBooks makes tracking business expenses easier. It’s ideal for self-employed professionals, freelancers, or small business owners. Faster payment, easier invoicing, and accurate billing are some of its highlight features.

Upwork 1099-K Requirements

Some general requirements to receive the 1099-K include the following:

• Being an independent contractor in the U.S.
• Receiving over $600 in a calendar year

Before 2023, the law stated that Upwork must fill out a 1099-K form if you earn more than $20,000 and have more than 200 transactions. This meant that freelancers who earned $35,000 and had 150 transactions wouldn’t have received the 1099-K form. This rule is no longer current, as the new 2023 law introduced the $600 threshold.

It’s important to note that the 1099-K is used to report payments and not earnings. Upwork needs to report all payments that are sent to freelancers, regardless of the fees and refunds paid.

All freelancers on Upwork should make their estimated quarterly tax payments to the IRS. Check out our comprehensive guide for more information on estimated tax payments. Once the tax season approaches, it’s important to have made all of your estimated tax payments, so you can avoid paying a penalty.

The quarterly payments are due on the following dates:

• By April 15, for the first quarter
• By June 15, for the second quarter
• By September 15, for the third quarter
• By January 15, for the fourth quarter

Keeping track of your quarterly taxes is easy when using accounting software like FreshBooks.

How to Get 1099-K Form From Upwork

All freelancers or independent contractors will receive their 1099-K form if they are eligible. If you earn more than $600 per year and haven’t received your form you can download a report and report the income on your taxes.

You should also have a completed W-9 form on the platform. Make sure the tax address is updated and that you have a valid Tax Identification Number (EIN, SSN, or ITIN). Upwork can only send you the 1099-K form when they are certain the information matches your tax ID. The IRS requires the files to be correct to avoid any misunderstandings.

Also, if you don’t provide the TIN on the W-9, Upwork will have to withhold taxes and submit them to the IRS at pre-set tax rates.

Most independent contractors receive their 1099-K by January 31 each year to cover the prior year earnings. 

Upwork mails or emails the 1099-K forms to freelancers. That’s why you should have your address updated and valid. You can update your address in the “Settings” then “Tax Information” section on your Upwork profile.

Frequently Asked Questions

Does Upwork send 1099 Form?

Yes, Upwork will send the 1099-k form to your mailing or email address if you’re eligible to receive one. You can expect to receive one by January 31st for the previous year.

Does Upwork send 1099-NEC?

Upwork doesn’t send 1099-NEC forms to freelancers who earn over $600 in a year. The clients of these freelancers also aren’t required to send them 1099-NEC or MISC forms.

Can I write off Upwork fees?

Yes, it’s possible to deduct Upwork fees for tax write-offs. You can count them as business expenses for taxes. Other tax deductible payments include service fees, travel expenses, equipment expenses, and more.

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