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What is Form W-9?

what is W9?

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Understanding the definition, requirements, and how to ask a form W-9 is crucial. Hiring someone has been one of the most challenging tasks due to the extensive paperwork involved as an employer. W-9 is one of those no-brainer forms that helps employers accurately report taxes, avoid penalties, and streamline record-keeping.
This blog will guide you through the significance of W-9 form details that every employer and employee should know. 

 

What is W-9 Form?

The W-9 form is an IRS form for employers or businesses to obtain information on the name, address, and tax identification number of freelancers or independent contractors. While the employers request the W-4 form for the employee, they ask the independent contractors to fill out the W-9 form. The information included in the W-9 form is payment and dividends to the freelancers. The information on the W-9 form helps to furnish the 1099 form. 

The employer does not withhold income tax, and the contractors/venders pay their own taxes on their income — all of this is disclosed by Form W-9. The W-9 is divided into two sections; the top section pertains to the contractor’s name, address and taxpayer identification number (TIN) (as well as any exemptions if applicable). Similarly, if you split it into two parts, the second part has the signature of the payee and proves that the ID info is authenticated. Neither of the parties have the right to share the W-9 form information for any other reason than contract work. 

 

Information Needed on a W-9 Form

  • The W-9 form requires the following information: Full name 
  • Business name TIN (SSN for individuals and EIN for businesses) 
  • Complete mailing address 
  • Exemption code (if applicable) 
  • Federal tax classification (e.g., individual/sole proprietor, C corporation, S corporation, partnership) 
  • Bank account number 

 

How to complete a W9 Form?

To complete a W9 form, you would require:

  • Personal information – your name, address, and tax ID number

Enter your full legal name as it appears on your tax return. If you are filling out the form for a business, use the business name. If you have a business name or a “Doing Business As (DBA)” name, list it in Line 2. For Line 3, check the box that applies to your tax classification:

  • Individual/Sole Proprietor or Single-Member LLC
  • C Corporation
  • S Corporation
  • Partnership
  • Trust/Estate
  • LLC (specify C, S, or Partnership in the space provided).

If your business is exempt from backup withholding or FATCA reporting, enter the appropriate code(s) in Line 4. Next, you need to enter your mailing address where the requester can send your Form 1099 or other correspondence.

 

  • Tax classification and sign and date the form to confirm accuracy.
    TIN: Enter your Taxpayer Identification Number:
    • For individuals: Use your Social Security Number (SSN).
    • For businesses: Use your Employer Identification Number (EIN).
    • If you are a sole proprietor, you can use either your SSN or EIN.

 

  • Certify the Form
    • By signing, you confirm:
      • The TIN you provided is correct.
      • You are not subject to backup withholding (unless specifically notified by the IRS).
      • You are a U.S. person (citizen or resident alien).
    • Sign your name to certify the information and enter the date of completion.

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Note: W-9 forms don’t typically expire but should be updated if there are changes, such as a change in business structure, address, or TIN.

 

Request for a W9 Form

To request a W-9 form from someone, follow these steps:

  • Determine who needs to fill out the W-9 form. This is typically someone you will be paying and need their Taxpayer Identification Number (TIN).
  • You can download the W-9 form from the IRS website. Send this form to the recipient via email, mail, or in person.
  • Inform the recipient that the W-9 form is used to provide their correct TIN to you, which you need for tax reporting purposes.
  • Ask the recipient to complete the form, including their name, business name (if applicable), address, and TIN. They should then sign and date the form.
  • Once you receive the completed W-9 form, store it securely. Do not send it to the IRS; it is for your records to ensure accurate tax reporting.

 

What if you receive a W9 Form request?

Receiving a W9 Form request means someone needs your tax identification information. Provide accurate details within the given timeframe. If they do, they may withhold taxes from payments made to you. Keep a copy of the completed form for your records.

If it’s from someone you don’t know

When someone unknown requests a W9 form from you, they need your taxpayer identification number (TIN) for tax purposes. Ensure that the form is filled out accurately to avoid delays or penalties in processing. In case of doubts about any of its contents, consult a tax professional or the Internal Revenue Service (IRS) website. It’s vital to keep copies of all completed forms for your records.

If it’s from your employer

When your employer requests you to fill out a W9 form, it signifies that they intend to pay you as an independent contractor. It is crucial to provide accurate information and promptly return the completed form to ensure payment is on time. The payer utilizes the details on the W9 form to generate a 1099-NEC form at year-end for tax purposes. Ensure you keep a copy of the completed W9 form for your records.

 

In conclusion, filing a W9 Form is essential to ensure all taxpayers are accounted for, and the government can track and regulate income. It benefits the government and helps businesses maintain accurate records and avoid penalties.

 

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