How Do I Report Income From UpWork?
If you’re a freelancer who uses UpWork to find clients and complete projects, you may be wondering how to report your income from the platform on your taxes. After all, UpWork is a self-employment marketplace, so your earnings are considered taxable income.
Fortunately, the process for reporting your UpWork earnings is relatively simple. Here’s what you need to know.
When it comes to taxes, your UpWork earnings are considered self-employment income. This means that you will need to report them on Schedule C of your Form 1040 tax return.
Schedule C is used to report income or loss from a business that you operate as a sole proprietor. So, if you earned $5,000 from UpWork last year, you would report that amount on Schedule C.
In addition to reporting your total UpWork earnings on Schedule C, you will also need to pay self-employment taxes. These taxes consist of Social Security and Medicare taxes, and they are calculated based on your net earnings from self-employment. For example, if your net earnings from UpWork were $5,000 last year, you would owe $735 in self-employment taxes.
Paying self-employment taxes can be a bit complicated, but the good news is that you can deduct half of the amount owed from your taxes. So, in the previous example, you would only owe $367.50 in self-employment taxes (half of $735).
As a freelancer who uses UpWork (or any other self-employment marketplace), it’s important to keep track of your earnings and expenses throughout the year. This will make it much easier to complete your tax return come tax time.
Reporting your income from UpWork is simple: just include your earnings on Schedule C of your Form 1040 tax return. Don’t forget to pay self-employment taxes (which you can deduct half of from your taxes), and keep track of all your earnings and expenses throughout the year.