Upwork Taxes How to File Your 1099 for Upwork income
Upwork is one of the most popular freelancing platforms in the USA, but many freelancers are confused when tax season arrives.
If you earn money on Upwork, the IRS considers that income taxable, even if you work part-time or as a side hustle.
This guide explains Upwork taxes, how the 1099 form works, and how to file your taxes correctly while maximizing deductions and staying IRS-compliant.
Do You Have to Pay Taxes on Upwork Income?
Yes. All Upwork income is taxable in the United States.
You must report Upwork income if:
You earned money as a freelancer or independent contractor
You received payments via Upwork or direct client contracts
You worked full-time, part-time, or occasionally
📌 Even if you do not receive a 1099, you are still legally required to report your income.
Which 1099 Form Does Upwork Issue?
Upwork may issue one of the following:
1099-NEC
Issued if you earned $600 or more
Shows non-employee compensation
Most common form for Upwork freelancers
1099-K
Issued if payments are processed through third-party payment systems
Reports gross payments, not profit
⚠️ You may receive both forms in some cases — but you should report income only once.
Where to Find Your Upwork 1099
Log in to your Upwork account
Go to Settings → Tax Forms
Download your 1099 (if issued)
Forms are usually available by January 31
How to File Taxes on Upwork Income (Step-by-Step)
Step 1: Add Upwork Income to Schedule C
Report income on Schedule C (Profit or Loss from Business)
Include all Upwork earnings (even if no 1099)
Step 2: Deduct Business Expenses
You pay tax on profit, not total earnings.
Common Upwork deductions:
Home office
Internet & phone
Laptop & equipment
Software subscriptions
Marketing & ads
Education & courses
Upwork service fees
Step 3: Pay Self-Employment Tax
As a freelancer, you pay:
15.3% self-employment tax
Federal income tax
State taxes (if applicable)
📌 Part of self-employment tax is deductible.
Step 4: File Your Tax Return
Use Form 1040
Attach Schedule C & Schedule SE
File electronically or with a tax professional
Do You Need to Pay Quarterly Estimated Taxes?
If you expect to owe $1,000 or more, the IRS requires quarterly estimated tax payments.
Payment deadlines:
April
June
September
January
Paying quarterly helps avoid penalties.
What If You Don’t Receive a 1099 from Upwork?
You must still report:
Payments received
Funds withdrawn to your bank
Gross earnings shown in Upwork reports
📌 IRS audits look at bank deposits, not just 1099 forms.
Common Upwork Tax Mistakes to Avoid
❌ Not reporting income without a 1099
❌ Forgetting to deduct Upwork fees
❌ Mixing personal and business expenses
❌ Skipping quarterly payments
❌ Poor bookkeeping
Why Bookkeeping Is Important for Upwork Freelancers
Proper bookkeeping helps you:
Track income accurately
Maximize deductions
Avoid IRS penalties
Prepare for audits
Save money on taxes
Professional bookkeeping ensures your Upwork income is organized, compliant, and stress-free.
Final Thoughts
Filing taxes on Upwork income doesn’t have to be complicated.
As long as you:
✔️ Report all income
✔️ Deduct valid expenses
✔️ Pay self-employment taxes
✔️ Keep good records
…you’ll stay fully compliant with IRS rules.
📌 Need help with Upwork bookkeeping or tax preparation?
Working with a professional can save you time, money, and stress.