As a freelancer, you are considered an independent contractor. This means that you are responsible for paying your own taxes. The good news is that you can deduct many of your expenses, including your home office, internet, and phone bill. You will also need to pay self-employment tax, which is Social Security and Medicare tax.
The amount of tax you owe will depend on how much money you made through UpWork. If you made less than $400, you likely won’t owe any taxes. If you made between $400 and $4000, you will owe self-employment tax, but not income tax. And if you made more than $4000, you will owe both self-employment tax and income tax.
To figure out how much tax you owe, first calculate your net income by subtracting your expenses from your total earnings. Then, use the IRS’s self-employment tax calculator to estimate your self-employment tax liability. Finally, use the IRS’s income tax calculator to estimate your income tax liability. Remember to factor in any state or local taxes that may be applicable to you as well.
Paying taxes may not be fun, but as an independent contractor, it’s important that you stay on top of them. By understanding how taxes work and taking advantage of deductions, you can minimize the amount of taxes you owe each year.
Do You Have to Pay Tax on UpWork?
As a freelancer, you are considered an independent contractor. This means that
you are responsible for paying your own taxes.
The good news is that you can deduct many of your expenses, including your home office, internet, and phone bill.
