It is expected that requests as part of normal business operating activities will be fulfilled. In this optional step, you can provide the requester’s name and address. You might want to fill out this box to keep a record of to whom you provided your tax identification number. If you’re not sure what type of business entity you should select, the IRS has provided a summary table for guidance as part of the Form W-9′s instructions.

Review the list below for explanations to a few common terms found on this form. Completion instructions are at the bottom of the form if you have additional questions. However, most people will find the form simple and quick to complete. Millions of companies use Square to take payments, manage staff, and conduct business in-store and online. The person who signs a W-9 must be a U.S. person, an individual who is a U.S. citizen or a U.S. resident alien. The signer should have the organization’s consent to sign a W-9 on its behalf.

What Types of Information Returns are Prepared from Form W-9?

A W-9 form is crucial to filing your taxes if you’re a contract worker, a freelancer or self-employed. The companies you work with do not have to withhold paycheck taxes for you, and the W-9 serves as an agreement that you are responsible for paying those taxes on your own. Independent contractors fill out the W-9 to confirm their tax responsibilities and provide information to their employer(s). In turn, employers use a contractor’s W-9 to complete a 1099 detailing the worker’s income. You can enter either your Social Security number (SSN) or your employer identification number (EIN).

Our tax pros speak the tricky language of taxes and are committed to helping you better understand your return. You might have other questions as you complete a Form W-9, so download the instructions with the form. Although Form W-9 is a standard tax document and by itself, it doesn’t pose many problems, there are a few situations worth watching for. The name on line 1 should never be a disregarded entity – a single owner LLC. If you are running a sole proprietorship you would enter YOUR name. But you might not get a mailing from the Internal Revenue Service (IRS) telling you that a W-9 is due.

Do I Have to Pay Taxes if I Fill Out a W-9?

Before you even fill it out, verify that the request for your form is legitimate. Use a secure method of delivery, like hand delivery, mail or encrypted file attachment. You want to make sure you’re not accidentally sending your personal information to the wrong people.

Your client, bank, or other financial institution has to send you a W-9 themselves if they need you to fill one out. If you think you have to fill one out, it’s probably already on the way. Filers of 1099 information return forms prepared from W9s can use the TIN Matching service available through the IRS website. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Our partners cannot pay us to guarantee favorable reviews of their products or services.

What Is a W-4 Form? How to Fill Out an Employee’s Withholding Certificate in 2023

The following line, Line 6, leaves a space for you to enter the city, state and ZIP code of this address. If your small business is collecting W-9s, you should make sure to send them well before the 1099 deadline. The deadline for form 1099-MISC and 1099-NEC is January 31, and most other 1099s are due around the same time. The account number(s) section only applies if you need to send account information (like a brokerage account) to the recipient of form W-9. If you’re unsure, it’s best to reach out to whoever requested the form W-9 from you.

Failing to file correct information returns or furnish the correct payee statements can result in costly penalties. Ultimately, the W-9 form purpose is to simplify the tax reporting process for businesses and individuals alike. Another W-9 form purpose is to help businesses identify which vendors require the submission of information returns. This means it can also be used as proof that you do not need to file an information return.

What Is a W-2 Form? How the Wage and Tax Statement Works

Certain businesses and organizations are exempt from backup withholding in certain instances and will need to fill out this line. Should any of these apply to your situation, you’ll need to provide a number or letter code from the instructions representing the reasons behind making this declaration. In most cases, corporations and businesses will be exempt from backup withholding. Form W-9 will have your personal identifiable information and states whether you’re subject to backup withholding. Unless you are subject to backup withholding, this individual or business will not withhold taxes on your behalf.

• You can submit a signed Form W-9 either electronically or on paper.
• Free services are available online to help you do this, but check their reputations before trusting your documents to them.
• The payee uses the information to prepare their income tax return for the tax year.
• W-9 tax forms request vendor information and certifies its completeness.
• There are no guarantees that working with an adviser will yield positive returns.
• The main W-9 form purpose is to gather essential tax identification information from individuals and businesses to assess the necessary amount of W-9 taxes that need to be paid.

In most cases, this would occur if the entity filling out the form was a corporation or a nonprofit organization. Use Line 7 if you need to supply the person or business paying you with account information such as a bank or brokerage account that pertains to the request for the W-9. Several types of individuals and businesses can fill out Form W-9. These are the options for which box you should check on line 3. When beginning to work as either an independent contractor or an employee, you should expect to fill out some paperwork providing your personal identifiable information.

To be safe, some businesses will send out Form W-9 to every single one of their contractors to fill out ahead of time, even if they don’t expect them to perform $600 of work for them. Some accountants will even suggest collecting a W-9 before issuing any payments at all to encourage people to file up-front. A W-9 form isn’t submitted to the IRS but provides information businesses use to complete a 1099-NEC form of a person’s annual earnings. Form W-9 also certifies whether the contractors or gig workers are subject to backup withholding, meaning the business has to withhold income tax for the person and send it to the IRS. Individuals who are subject to backup withholding will have previously been notified by the IRS and need to indicate their status on their W-9.

The entity paying the taxpayer (the person or business rendering the services) receives the W-9 form from the taxpayer. When reporting the payments made to the taxpayer at the end of the year, the organization uses the data on the W-9 form to create and issue Form 1099-MISC or other applicable tax forms. A Form W-9 must be completed by one party and furnished to a second party if the second party is going to furnish specific types of payments in the future. Most broadly, Form W-9 must be filled out by independent contractors that perform work for another party with which they are not employed. This includes freelance workers or gig employees under non-employment structures.

Again, doing so will make it easier to match any 1099s you receive with your tax return, which you will file under your SSN. Even though employees are legally required to supply certain personal information to their employers, an employee’s privacy is protected by law. An employer who discloses an employee’s personal information in any unauthorized way may be subjected to civil and criminal prosecution. The form, officially called Form W-9, Request for Taxpayer Identification Number and Certification, is typically used when a person or entity is required to report certain types of income. If you’re paying someone and have to report those payments to the IRS, you’ll need their Social Security number or EIN.

Is a W-9 Used for Self-Employed Individuals?

In other words, it’s the form you use to get account information about vendors, independent contractors, sole proprietors or freelancers. The general rule is that you will need to request a W-9 form from anyone you will pay $600 or more to in a calendar year as a trade or business. A W-9 form is a formal written request for information w9 form means only and is used solely for the purpose of confirming a person’s taxpayer identification number (TIN). For most individuals, the TIN will be their Social Security Number (SSN). You can usually prevent backup withholding by supplying the correct information when requested and paying an appropriate amount of taxes each year.

If you ever find yourself filling out a Form W-9, it generally means a business or person who is paying you money needs your U.S. Taxpayer Identification number (TIN)–which can be the U.S. Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Federal Employer Identification Number (EIN/FEIN)–so the business/person can notify the IRS of the amount. You send it to the employers who have requested it from you.