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Why are payments that I refunded to a client showing on my Form 1099-K?

The U.S. Internal Revenue Service requires Upwork to report all gross payments to freelancers on Form 1099-K. We cannot deduct refunds that you pay to clients from the total that we report. For example, if your client paid you $5,000 USD, but you refunded $1,000 USD. We still have to report the total $5,000 USD total to the IRS, not just the $4,000 USD that you kept. Please consult your tax advisor about what earnings and expenses you should claim on your taxes.

 

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