The first space in line 4 indicates that the taxpayer is exempt from backup withholding. Individuals and sole proprietors will almost never be exempt from backup withholding, but in certain situations corporations are exempt. The payee codes and circumstances are listed on the third page of the W-9. If you qualify for one of these conditions, you would place the appropriate code number in the first space for line 4. Software programs and apps can be used to request taxpayer identification for individuals and businesses as well as aid in the collection of W-9 information from your vendors. Additionally, your accounting program may have options to input W-9 data for storage and recovery.
- Amy Fontinelle has more than 15 years of experience covering personal finance, corporate finance and investing.
- For instance, if your business hires a freelance graphic designer to create your business logo, you will need to collect a W-9 form from them.
- You will need to specify if the entity is a C corporation, S corporation, Partnership, Limited Liability Company (LLC), etc.
- These are the options for which box you should check on line 3.
If you’re an employee, your employer will withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on your wages. Instead of filling out a Form W-9, new hires are often asked to fill out a W-4 to provide their taxpayer information to their employer. Businesses use the name, address, and Social Security number or tax identification number contractors provide on Form W-9 to complete that information return. Neither the sender nor the recipient should send a copy to the IRS. In addition, the business requesting the tax information must safely secure copies of the form.
How to Fill Out Form W-9
Take extra precaution when filling out the form to protect sensitive information and correctly report tax status. If you are self-employed and receive over $600 in a year from an individual or business, the payer must provide you with a Form 1099-NEC to verify your income to the IRS. Before your client can prepare your Form 1099 you must give them a valid taxpayer identification number. If a US business hires an independent contractor who is not a US citizen or a US tax resident, they collect Form W-8BEN (for individuals) or W-8BEN-E (for entities) instead. If you find yourself overwhelmed with IRS forms, consider working with a tax professional or looking into tax software to help you manage your business’s tax needs. If you use Square to run your business, team members can submit most tax information independently while Square keeps track of payments and submits forms on your behalf.
As an independent contractor, vendor, freelancer or other individual receiving nonemployee compensation, you typically do not work for the person or business as an employee. If you don’t work as an employee, https://www.bookstime.com/ you’ll typically have your earnings reported on a Form 1099-NEC and will need to prepare a W-9. Broadly speaking, anyone who will receive compensation as a non-employee is required to fill out a W-9.
What Form W-9 Means to Small Business Owners
Participants in a contest that may win prizes may also be required to fill out a W-9, as the prize value may be taxable income and require IRS reporting. 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. In the post, you’ll find information about requesting W-9s for business vendors and contractors.
It’s also vital to review the forms immediately as you receive them so you can contact vendors quickly after receipt for any additional required information. Doing so will ensure you are safe https://www.bookstime.com/articles/what-is-a-w9 from penalties and are reporting all payments to the government in a legal manner. The best thing to do is to contact your vendor and request a Form W-9 before you make your first payment.
Сomplete the w9 form 2018-2023 for free
If you receive an email request for a Form W-9 and you’re not sure it’s legitimate, contact the supposed sender by phone (and don’t use any phone number in the suspicious email) to ask if the request is valid. Attackers are sophisticated and can make a message look like it came from your bank or even your client. And if you get an email from the IRS, it’s definitely a phishing attempt, and you should forward the email to The IRS doesn’t initiate contact with taxpayers via email. If you think the person requesting the form has no business asking for it, though, refusal is probably a good idea. Otherwise, one option is to use a free online service to encrypt your completed Form W-9 and email it securely to the requester.
- Form W-9 requires you to include information on your business type.
- If you’re unsure, it’s best to reach out to whoever requested the form W-9 from you.
- If you’re an independent contractor, the company should request a Form W-9 from you.
- The IRS requires that you show you made a minimum of three solicitations for the TIN.
- If you complete Form W-9 as an individual, you don’t need to worry about filling out this section.
- For other types of reported payments, such as 1099-S or 1099-B forms, the 1099 filing deadline is Feb. 15.
- Common examples of payments requiring a Form 1099 are nonemployee compensation (1099-NEC), miscellaneous income (1099-MISC), dividends (1099-DIV), and cancellation of debt (1099-C).
Even though they are technically a business entity, sole proprietors must put their own legal name in this section. As with most tax documents, businesses should keep copies of all W-9 forms for at least three years after the last relevant tax return was filed (or the return’s due date, if later). If you’re a contractor and you receive 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 W-9s to collect the SSNs of unsuspecting individuals.
All You Need to Know About Form W-9
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- These can be found at the IRS Forms webpage and the Wisconsin Department of Revenue Forms webpage.
- With TurboTax Live Full Service Premium, have a dedicated expert uncover every tax deduction and file your investment and self-employment taxes for you.
- Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
- If you’re unsure why you’re being asked to complete the form, ask what types of tax documents you can expect to receive when the
information is used.
- Scammers will sometimes send W-9s to collect the SSNs of unsuspecting individuals.
- Then in January, you’ll receive your 1099-MISC form that documents your annual earnings.
- The business will need to collect a W-9 form from the contractor to obtain that information.