As a freelancer, you are considered an independent contractor, which means you are responsible for paying your own taxes. When you complete a project on UpWork and receive payment, UpWork will report your earnings to the IRS. You are then responsible for paying any taxes owed on those earnings.
There are a few different ways that you can pay your taxes as a freelancer. The most common way is to simply set aside money from each project you complete and put it into a savings account that you only use for taxes. That way, when tax time comes around, you will have the money available to pay your taxes.
Another way to pay your taxes is to estimate how much you will owe at the end of the year and make quarterly payments to the IRS. This can be a good option if you are not good at saving money or if you tend to make a lot of money in a short period of time and then have nothing left over for taxes.
The best way to make sure that you are paying your taxes correctly is to hire an accountant or bookkeeper to help you keep track of your earnings and expenses and file your tax return for you. This can be a good option if you are not comfortable dealing with the IRS yourself or if you want someone else to handle the paperwork for you.
No matter which method you choose, it is important that you stay on top of your tax obligations as a freelancer. If you don’t pay your taxes, you could face penalties and interest charges from the IRS, so it’s important to be proactive about paying them.