What am I supposed to do with this Form W-9?
You may have been asked recently to complete a W-9 form and are asking, “what exactly is this?”. Or, you might know what it is and are confused as to why you’re receiving that specific form.
I wanted to take a few moments to shed some light on what the W-9 form is for, what information you need to provide, and a few tips for how to handle the form when you receive it.
What is a W-9?
According to the IRS website:
“Use Form W-9 to provide your correct TIN (Tax Identification Number) to the person who is required to file an information return with the IRS.” For example, a 1099-MISC form must be provided to anyone who was paid $600 or more for services in a calendar year.
When you’re a contract worker, you are required to report on your tax return any income you earn from providing your services.
The IRS will know how much income you should be reporting when the company you did work for submits a Form 1099, which I’ll go into more detail about in my next blog. Some business types are required to receive a 1099 and others are not. A W-9 provides the person who paid you with the appropriate information they need to file your income information with the IRS.
What info do I have to give?
The W-9 is a simple form as far as tax documents go. You will need to provide:
Your full legal name (and your business name as applicable)
Your Tax Identification Number (can be either your Social Security Number or your Employer Identification Number (EIN) if you have one)
Your legal address
Your tax classification (sole proprietor, LLC, etc.).
I have some people who express concern about having to give a company their SSN. I understand that identity theft is real, but so is the legal requirement for this information to be provided. It is no different than providing the information on a W-4 when you are hired as an employee and you can easily send it as an encrypted PDF to increase security.
A few tips about Form W-9
I wanted to close by sharing a few tips about what to do with the W-9.
Don’t be offended if you get one
I realize that many companies are not required to receive 1099 forms, but the people issuing them have no way of knowing that unless you tell them via the W-9. In other words, if your tax filing status (like a C-Corp, S-Corp, or some LLCs) means that you don’t need to be issued a 1099, you must officially notify the person requesting the information via the W-9.
Return the Form W-9 quickly
Ideally, you will receive a W-9 when you first start working for someone but that’s not always the case. Whether you are asked to complete a W-9 as soon as you start working or if it’s right before 1099s are due (January), you should complete and submit the form as soon as possible.
Not sure of tax filing status?
Ask your tax preparer. Ideally, you would know if you are a sole proprietor, LLC, or one of the other tax entity forms but I know the details on some of them (like LLCs!) can be murky. When in doubt, ask your tax preparer.
Let me help!
I do 1099s for all of my bookkeeping clients. If you were overwhelmed with yours this year, or if you didn’t know if you need to file, give me a call!