What is Form W-9?
It is used by independent contractors and self-employed workers to provide their correct taxpayer identification number (TIN) to entities that will pay them income. Officially called the Request for Taxpayer Identification Number and Certification, the form shows the independent contractor’s name, address, and social security number (SSN) or employee identification number (EIN).
Why do you need to use Form W-9
If you are a freelancer or work as an independent contractor, a client may request that you provide a W-9 so they can keep it in a file and accurately report the payments they make to you. The company that hires you as a freelancer or independent contractor usually provides you a blank W-9 form which you will need to complete and return to them.
When do you need to use Form W-9
You need to create this form when you are required to report certain types of income as a freelancer or independent contractor. The information recorded on W-9 Form is used by companies to prepare 1099-MISC forms at the end of the year. Companies used the W-9 Form for verification purposes but rarely send to the IRS.
What are the main things that go on this form?
Filling out the form is pretty straightforward as it requires a few pieces of basic information.
Provide your full name and Social Security Number in box 1.
In box 2, provide your business name if you have any, otherwise leave it blank. For businesses, enter the business name at the top of the form and check the relevant box to identify the type of entity. The TIN is added on part one of the form, and it must be the correct TIN. Part two requires you to certify to the IRS that the information you provided is correct.
Then submit the completed W-9 to the person who requested it from you.
What are the most common mistakes to avoid?
The W-9 Form is relatively straightforward and easy to fill. However, you should make sure to avoid these common mistakes when issuing the Form 1099:
- Issuing the 1099 to employees, as they should be receiving a W-2 Form instead.
- Issuing 1099s to a corporation. Only independent contractors need the Form 1099. You can’t issue it to corporations. If you have hired a corporate business for a job, then 1099 is not necessary.
Do I need to use a lawyer, accountant or notary to help me?
It is not necessary to hire a lawyer or accountant to help you create the W-9 Form. You can do it online. Creating the form online can save you money than hiring a lawyer. There are different websites that assist you with questions, and intuitive software to guide you through each step of the process.
Why use our W-9 Form generator?
The easiest way to correctly complete a W-9 form is to use special services like Form Pros. It does not require the installation of additional software, and it saves you time and money.
Form W-9 FAQs
- How are W-9 and 1099 forms different?A W-9 is used to request the taxpayer tax identification number (TIN) of a US person, and to certify that the number is correct. A 1099 form is used to report taxable income for individuals that are not directly employed by the business entity or individual making the payment. Independent contractors are issued a 1099 for payments from clients, and a 1099 is also used to report royalties, prizes, and award winnings.
- How do a W-2 and a W-9 differ?Form W-9 is used to request Tax Id Number (TIN) of a US person. A W-2, on the other hand, reports annual wages paid to an employee, and the federal and state taxes withheld from the wages.
- Where do I get a W-9?In many instances, your employer or client (if you’re a contractor) will send a W-9 to you. You can also download a W-9 from the IRS website. Form Pros allows you to complete a W-9 electronically.
- How do I fill out a W-9?On lines 1 and 2, you enter either your name or your company’s name. If you’re filing a W-9 for your company, verify your firm’s business structure (C corporation, LLC, etc.) and complete line 3. Your address is posted to lines 5 and 6. Your signature certifies that the information you provide is correct.
- What is a United States activity?A “person” must complete a W-9, and the IRS considers a person to be a US citizen, or US resident alien. Business entities formed in the US are persons, along with estates and trusts formed in the US. These businesses, estates, and trusts are considered United States activities.
- Why is a W-9 needed for life insurance death claims?Anyone receiving payment for a life insurance death claim must complete a W-9 form. This includes beneficiaries, a trustee, an administrator of an estate, or the guardian of a minor. The W-9 documents the tax identification number of the party who receives a payment.
- What is an exempt payee on a W-9?Backup withholding means that persons making certain payments to you must, under certain conditions, withhold and pay 24% of such payments to the IRS. Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, and non-employee pay. If you provide your tax identification number, amounts will not be withheld from your payments. Federal and state governments, along with other entities, are exempt payees that are not subject to backup withholding amounts.
- How does a W-9 help the payee avoid backup withholding?If you provide your tax identification number, amounts will not be withheld from your payments, and you can avoid backup withholding requirements.
- Can I complete a W-9 electronically?Form Pros offers a W-9 generator that allows you to can create unlimited W-9 forms at a low cost.