Request for Taxpayer ID Number

If your are a freelancer, or an independent contractor by profession, you probably know what a W-9 is. It’s a good tax form because it usually means you have a new client. The form makes it easy to submit all your vital information to the client, so you can start working and they can start paying you.

At a glance:

• A W-9 form provides information for issuing Form 1099-NEC at the end of the year.
• Differentiate between a W-9 form and a W-4 form based on your working relationship with the company; a W-9 form is for independent contractors, while W-4 is for employees.
• Update your W-9 form whenever your information changes for active clients.

What is a W-9 tax form?

Form W-9, Request for Taxpayer Identification Number and Certification, is primarily used to provide the information your client needs to issue you a Form 1099-NEC at the end of the year. Form 1099 documents non-employee pay. It includes similar information to a Form W-2, Wage and Tax Statement.

Form W-9 example

This is what Form W-9 looks like:

The W-9 form asks for several pieces of information: your name, business name (if applicable), address, taxpayer identification number (also called a taxpayer ID or TIN), and the type of business entity you operate. It’s pretty painless as far as tax paperwork goes.

Form W-9 instructions

How do I fill out a W-9?

To fill out Form W-9, follow these steps:

1. Provide your personal information: At the top, fill in your name (or business name, if applicable), and check the box for your appropriate federal tax classification (e.g., individual/sole proprietor, LLC).
2. Enter your taxpayer identification number (TIN): This is likely either your Social Security number (SSN) or Employer Identification Number (EIN). Enter the correct number based on your tax classification.
3. Certify the form: In Part II, review the certification text carefully. Sign and date the form if all information is correct. This form is not sent to the IRS. It’s only sent to the payer. Just make sure your information is accurate, as the payer will use it to report income paid to you.
4. Watch out for red flagsAlthough Form W-9 is a basic and widely used tax document, that doesn’t mean you should take any less care with handling it than you would handle other tax and financial documents. Here are some things to watch out for:

The business or person asking you for the W-9 form appears shady.

In general you should be cautious about giving out sensitive information such as your name, address and Social Security number. Make sure you’re comfortable with the person or organization asking for a W-9 form before you supply that information.

Use only secure channels to send a W-9 tax form

• . If you decide to email Form W-9 as an attachment, be sure to encrypt it. If you’re not sure why the requestor wants a Form W-9 from you, ask them what tax documents they will use it to prepare for you. You thought you were receiving a W-4. If you are starting a new position and the employer asks for a W-9 rather than a W-4 to confirm your status, you should clarify whether you are an employee or independent contractor. It’s against the law for them to require you to work like an employee but pay you like a contractor.Special Form W-9 information for limited liability companies
• If the tax status of your limited liability company
• (LLC) is separate from you — such as a partnership, C-corporation, or S-corporation — list the LLC name, its federal employer identification number, and check the appropriate tax classification box on the W-9 tax form. If the LLC is owned and operated by another LLC, check the “limited-liability company” box. Please also indicate the tax classification for the parent LLC. What is a TIN
• A taxpayer identification number is what you will need to provide on the Form W-9. Your TIN will be either your SSN or your EIN. The W-9 is used to provide your SSN or EIN to the payer so they can accurately report your earnings to the IRS. You may be asked to fill out a W-9 if you are not a traditional worker but receive income outside of payroll. You may also be asked to complete a W-9 form by sportsbook sites based on the amount of money you have won betting on sports. You may be asked to fill out a W-9 by a company or an individual for real estate transactions or mortgage interest payments. They may also ask you to provide IRA contributions, cancel debts, or acquire or abandon secured property. Those are less common, however.Usually, the party requesting a W-9 tax form will provide a blank one for you to fill out. The IRS website allows you to download the form. What’s the difference between Form W-9 and Form W-4

What is the difference between Form W-9 and Form W-4

• The company you work for must classify you either as an independent contractor or employee. If you are an independent contractor, the business will ask you to fill out Forms W-9 . When you submit a Form W-9 to the company, it will not withhold taxes on your behalf. You’re responsible for paying the appropriate amount of taxes to the IRS yourself, including both the employer’s and employee’s portions of
• Social Security and
• Medicare taxes.

It can sometimes be tricky to determine whether to complete a W-9 or W-4 based on the work you do. The nature of the relationship between the employer and employee is a better indicator. Benefits like pension plans, paid vacation, and matching 401(k) contributions also indicate employee status. Benefits like pension plans, paid vacation, and matching 401(k) contributions also point to employee status.

Some employers may try to cut costs by classifying employees as independent contractors, avoiding their share of

Social Security

and

Medicare

taxes. You must send out a W-9 to clients or customers whenever you change your name, business name, Social Security number, or address. Ask them why they require a W-9 if someone unexpectedly requests one. If I don’t submit Form W-9?

If you don’t submit the W-9 form when a business asks for it, you may be subject to backup withholding of up to 24 % on your payments. It is important for independent contractors and freelancers to have Form W-9. While handling tax forms can feel like a chore, getting it right from the start will make tax time a breeze! Tax forms can be a hassle, but if you do it correctly from the beginning, it will make your tax time easier.

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