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W9 vs 1099: A Simple Guide to Contractor Tax Forms

Form W-9 and Form 1099 are both tax forms, and they’re both sent to independent contractors. But they accomplish different things.

What is Form W-9?

A W-9 is sent by a client to a contractor to collect their contact information and tax number. Then, the client uses that info to fill out a Form 1099. It’s the client’s duty, as someone who is contracting work, to send the contractor Form W-9 before the end of the financial year.

The contractor’s job is to fill it out with tax info for their business. (Unless they’ve registered a business name, or incorporated, their person and their business are identical for tax reasons.)

What is Form 1099?

Each client a contractor invoices for more than $600 is required to send the contractor a Form 1099. This form lists what they’ve paid them over the course of the prior tax year. Typically, a contractor will get Form 1099 from a client in January—the beginning of tax season.

The client also sends a copy to the IRS. The IRS looks at the Form 1099s from all the contractor’s clients to see how much money they’ve made during the year. Then, they check it against the income the contractor reports, to make sure they aren’t bending the truth. They want to be certain contractors are paying taxes on everything they’ve earned.

That’s the short story. To get a better sense of how Form 1099 works, check out our guide to Form 1099.

Here’s a short table comparing the two forms:

Form W-9 Form 1099
For clients to collect tax information from independent contractors Used by clients to record how much they’ve paid an independent contractor over a year
Submitted once, and then again only if contractor’s information changes Submitted yearly any year contractor has been paid >$600 by client
Contractor fills it out Client fills it out
Provides client with contractor’s contact info and tax number Provides contractor and IRS with summary of how much client paid contractor
Client sends a blank copy to contractor, who then returns it to client Client sends one filled out copy to the contractor, and one to the IRS
Should be sent to contractor before they begin working for client Should be sent to contractor and IRS before the end of January

How to fill out Form W-9

Here’s what Form W-9 looks like.

Form W9

You can download a copy of Form W-9 and read the instructions sheets to get the full IRS rundown on how it should be filled out.

Most of it is pretty straightforward. However, there are a few places contractors tend to stumble:

  1. If you’re a contractor, you only need to fill out a business name if you’ve actually registered one. Otherwise, just fill out the top line and leave this one blank.

  2. Don’t forget to note what type of entity your limited liability company (LLC) files taxes as—a C corporation, S corporation, or Partnership. If you’re not sure which you are, take a hot minute to learn more about LLCs.

  3. Generally, if you don’t have a Taxpayer Identification Number (TIN) or Employer Identification Number (EIN), you should enter your SSN here.

Heads up: Form W-9 and security

Any time a contractor receives a Form W-9, they should make sure they understand who it’s coming from. If you’re a contractor and you get a Form W-9 from an individual or business who is not a client, do not fill it out. Sending off your Social Security Number (SSN) and other info to a stranger could put you in an awkward position—like having your identity stolen.

Also, when sending off Form W-9, do it securely. That means sending it as an encrypted file attachment. Or, if you like licking stamps, mail a hard copy to your client.

How to deal with Form 1099

Here’s a sight to behold: A Form 1099 that’s totally blank.

2022 Form 1099 NEC

Typically, when a contractor gets a Form 1099 from a client, some of those blue boxes are going to be filled in—with the contractor’s name, address, the TIN they entered on Form W-9, and other info.

If you’re a contractor and you get a Form 1099, keep a copy for your files. Box 7 tells you how much your client paid you. Once you’ve got all your Form 1099s for the year, add up all the Box 7s to get most of your income.

Most of your income—remember, if you’re a client, you only have to send contractors Form 1099 if you were invoiced for $600 or more total. But just because you don’t send a contractor a Form 1099 doesn’t mean they don’t have to report the income to the IRS.

Contractors should hold onto copies of all the invoices they sent during the year, too. That way, if a client paid them $599 (meaning a Form 1099 wasn’t required), they can still report the income—and avoid the risk of getting dinged by the IRS in case of an audit.

Suggested reading: Form 1099 Filing and Reporting Requirements

How Bench can help

Whether you receive a 1099-NEC or need to issue one to a contractor, having clear, accurate, and up-to-date books are essential when it’s time to file your taxes. Your Bench bookkeeper can provide detailed year-end financial statements, including a 1099-specific report, that make tax filing a breeze.

In January, your Bench-provided 1099 report can tell you:

  • Who you need to file 1099 NECs for
  • How much you paid each person and what they were paid for, including the transactions associated with those payments

We’ll even let you know whether you need to file an NEC or MISC form for that 1099. Learn more.

Tax deadline for Form 1099

Clients are required to send contractors Form 1099-NEC by January 31, 2022.

Tax deadline for Form W-9

There is no tax deadline for Form W-9. It’s up to clients to get filled-out W-9s from their contractors before the end of the tax year, so they can file their taxes and send them their Form 1099s.

Technically, a client is required to have a contractor fill out a Form W-9 before they pay them. Not all clients follow the rules, though. It’s not out of the question for a contractor to receive a W-9 near the end of the tax year, as their client scrambles to get their taxes done on time.

Sadly, 1099 and W-9 aren’t the only forms you need to keep track of. To stay on top of all your obligations for the year, download the Bench Small Business Tax Checklist.

What's Bench?

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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