Form W-9 is one of those really simple IRS Forms that has precisely one function: it lets you send your Tax identification number (TIN)—which is your employer identification number (EIN) or your social security number (SSN)—to another person, bank, or other financial institution.
W-9 is a straightforward “information return”, meaning it’s just for giving someone else a piece of information they need (rather than the IRS). But because you’re not sending it to the IRS, you need to be careful about who exactly you send it to.
Here’s everything you need to look out for when filling it out.
What is form W-9?
Form W-9, Request for Taxpayer Identification Number and Certification is a one-page IRS information form that individuals use to send their taxpayer identification number to other individuals, clients, banks and other financial institutions.
Most often, you send it to someone so that they can then send you back Form 1099, which you need to submit to the IRS if someone paid you more than $600 this year.
Form W-9 does not get sent to the IRS.
Who has to fill out a W-9?
There are four common situations in which you might be required to fill out and send someone a W-9 form:
You’re a contractor, freelancer or consultant and plan on getting paid more than $600 by one particular client in a tax year. They’ll need you to send them a completed W-9 before they can send you a Form 1099-MISC form. You’ll need that to report your income to the IRS.
Banks sometimes also need a W-9 when you open a new account with them.
Your bank or the financial institution you invest with might also need a completed W-9 from you in order to submit one of the other types of 1099 forms, which they’ll use to report things like interest income, distributions and proceeds from real estate transactions (i.e. if you sell your house).
If someone forgives or cancels a debt you owe them, they’ll need to file Form 1099-C with the IRS. They’ll need you to send them a completed W-9 to complete the process.
If someone other than a client, bank or other financial institution asks you for a W-9 form, you might want to think twice about sending one.
What is backup withholding?
If a contractor has been told by the IRS that they’re subject to “backup withholding,” that means the businesses paying their invoices have to withhold income tax at a flat 24% from the invoice and remit it to the IRS.
If a contractor is subject to backup withholding, they’ll have to indicate that on their W-9.
To learn more about who is subject to backup withholding, check out this IRS page.
When you should NOT send someone a W-9
If you get one from someone you don’t know
If you’re a contractor and you get a Form W-9 from an individual or business who is not a client, don’t fill it out. Sending your Social Security Number (SSN) and other personal information to a stranger could be dangerous. Scammers will sometimes send individuals W-9s to collect their SSNs.
If you’re suspicious about a W-9 that someone has sent you, ask them which tax forms they plan on sending you back after you fill it out. If you can’t get a straight answer, talk to a tax professional. Remember that the only reason anyone would ever need a W-9 from you is because they need it to send you some kind of IRS form.
If your employer sends you one
Employers shouldn’t ask you for a W-9 either. The appropriate form for them is form W-4. If you’re starting a full time job and your employer hands you a W-9 instead of a W-4, that could mean they’ve hired you as an independent contractor rather than an employee, and that you could be on the hook for tax payments to the IRS.
Where do I get one?
Your client, bank or other financial institution have to send you a W-9 themselves if they need you to fill one out. Generally speaking, if you have to fill one out, it’s on its way. You can also find a PDF version of it on the IRS website.
What does it look like?
W-9 is a one page form from the IRS. It also comes with five pages of instructions. The part that you have to fill out looks like this:
How do I fill it out?
The information part at the top:
1. Print your legal full name (as it appears on your tax return) here.
2. If you operate under a business name, write that in here.
3. In this part, you have to report what kind of business entity you’re running. You’ve got seven different choices:
- Sole proprietor/single-member LLC. If you’re doing business, don’t have a business partner and haven’t incorporated your business, you’re probably a sole prop.
- C corporation. If your company has shareholders and a board of directors and pays its taxes separately from its owners, it’s probably a C corp.
- S corporation. If you’re an incorporated flow-through entity (i.e. you only pay taxes once, rather than twice like a C corp), you’re probably an S corp.
- Partnership. If you’re unincorporated and share ownership of your business with one or more other people, you’re probably a partnership.
- Limited liability company. If you behave like a corporation at the state level, but are taxed like a partnership or sole proprietorship at the federal level, you might just be an LLC! This part will also ask you how you’re being taxed: as a C corp, S corp or partnership. Print C, S or P in the box to indicate which one applies to you.
- Other. This one’s for people who are filing outside the United States. If you’re an international business entity and don’t know how you fit into the America system, check out the IRS’s guide to international business entities.
5-6. Enter your contact information here.
When someone wants you to send them a W-9, this is what they want from you: either a social security number (SSN) or an employer identification number (EIN).
If your business has any employees or operates as a corporation or partnership, it probably needs an EIN to do business and file with the IRS properly. If you need one, check out the IRS’s online application form for the EIN.
If you’re a resident alien and aren’t eligible for an SSN, your TIN is your IRS individual taxpayer identification number (ITIN).
Signing and dating this section certifies that all of the information you’re entering here is correct.
When should I send W-9?
If someone’s asking you for a W-9, they need it to send you Form 1099, which you yourself will need to report certain kinds of income to the IRS. It’s in both your interest to get these forms in as soon as possible.
Although there’s no official deadline for filing W-9, you should fill it out as soon as you get one. And remember: if you fail to send someone a W-9 or send one with the wrong information, you may be subject to a $50 penalty.
What if I’m collecting W-9? Any tips on getting people to file?
If you’re collecting W-9s, you should make sure to send them well before the 1099 deadline. The deadline for form 1099-MISC is January 31, and most other 1099s are due around the same time.
To be safe, some businesses will get every single one of their contractors to fill out a W-9 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.
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