Who must complete the W-9 tax form?
A simple guide to navigate this common tax form.
The IRS (U.S. Internal Revenue Service) Form W-9, also known as a W-9, is a common tax form for many businesses and employees. However, as with all tax forms, only some workers will need to complete the W-9 form for their employer. Follow this handy guide to determine if you need to fill out a W-9 form when you start work.
What are W-9 forms for?
W-9 forms are the IRS’s way of calculating what taxes will be due from independent contractors or self-employed individuals who provide labor or services to a business. This form also exempts businesses from having to withhold and pay taxes on behalf of these independent contractors. You can also see these forms called “Request for Taxpayer Identification Number and Certification”.
What is the IRS Form W9?
Tax Form W-9 is a tax return used to collect an individual’s or entity’s U.S. taxpayer identification number(TIN). This document is essentially an“Application for Taxpayer Identification Number and Certification“.
Companies use it primarily to collect necessary information on independent contractors and other service providers in order to properly report payments made through tax forms such as Form 1099-MISC or 1099-NEC to the U.S. Internal Revenue Service (IRS).
Who needs to complete the W-9 form?
Employers working with independent contractors must provide them with a W-9 form to complete before they begin work. There are specific criteria for those who are classified as “independent contractors” and must complete the W-9 form. You will need to complete the W-9 form in the following cases:
- If you are classified as an independent contractor or “self-employed”.
- If you are not a full-time employee of the company.
- If you are paid more than $600 for the work to be provided to the company.
With many more businesses using freelancers or independent contractors to help them get their work done, the W-9 form becomes a more common prospect during tax time. Luckily, signing W-9s online is easier than ever. Get forms and contracts signed quickly using e-signatures with Adobe Acrobat Pro with e-signature.
What happens if a contractor does not provide a Form W-9?
If a contractor fails to provide a requested Form W-9, the paying company may be required to withhold a portion of the payment, usually 24%, and remit it to the IRS. This process is known as backup withholding and ensures that the IRS can collect taxes even if the contractor’s TIN is not available.
The information presented in this article is for informational purposes only. We always invite you to consult with a tax or legal professional in your particular case.
What are the differences between Form W-9 and Form W-4?
Form W-9 is used by independent contractors and suppliers to provide their tax information to the company that pays them. In contrast, Form W-4 is used by employees to report payroll tax withholdings to their employer. Both forms are important for tax compliance, but each applies to different types of employment relationships.
How to fill out the Form W-9?
Completing Form W-9 is a fundamental process that requires attention to detail. Below, we will guide you through the necessary steps:
- Provide your legal name: Enter your name exactly as it appears on your tax documents.
- Address: Indicate your current address of residence. Make sure the information is current and accurate.
- Tax Identification Number (TIN): Provide your tax identification number, which can be your social security number (SSN) or your tax identification number (EIN) depending on your situation.
- Certification: Carefully review all information provided and sign the form in the designated section. By doing so, you certify that the information is accurate and true to the best of your knowledge.
It is important to complete the form accurately step by step and certify that the information is correct before signing it. Errors in the information provided may result in tax complications and potential penalties.
If you have any doubts about which tax identification number to use or any other tax-related questions, do not hesitate to consult a qualified tax advisor. Their expertise will help you avoid costly mistakes and meet your tax obligations properly.
