If you're a freelancer who the I.R.S. defines as a “U.S. Person” and earn money working with your client through Upwork, you need to report this income on your tax return. And because of changes to the tax laws, most freelancers—including those who earned more than $600—will no longer receive a Form 1099-MISC from Upwork.
Freelancers who are not U.S. persons are not issued forms, and are instead asked to fill out a W-8BEN.
Either way, we recommend that you use your “Earnings by Client” report to accurately document your earnings.
As we mentioned above, most U.S. freelancers will not receive IRS forms. There are a few exceptions, however:
- Freelancers who are U.S. Persons and receive over $20,000 with more than 200 transactions through Upwork – You will receive a new form called the Form 1099-K. Under the Internal Revenue Code Section 6050W, Upwork will file a Form 1099-K form with the IRS for you, and you will receive a copy of your Form 1099-K via U.S. Postal Service by January 31 in order to accurately report your taxes.
- Employees paid through Upwork Payroll (W-2 employees) – If you and your client agreed that you are an employee, you must be hired through Upwork Payroll. When you use the Upwork Payroll service, our staffing provider will be the employer, handle all of the withholding and payment of taxes, and provide a Form W-2.