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What Are W-9 and 1099 Tax Forms?

what is a w9 tax form

When you begin working with a contractor or freelancer that you will be paying, you should request that he or she complete a Form W-9 prior to starting any engagement. Failing to do so could prove troublesome after beginning the work. 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. The requestor of the taxpayer information is not exempt from penalties either. If the requestor discloses or uses the the taxpayer’s TINs in violation of federal law, the requestor may be subject to civil or criminal penalties. IRS Form W-9, Request for Taxpayer Identification Number and Certification, is used by businesses to get tax information from external parties.

what is a w9 tax form

If you own a single-member LLC, which is taxed as a disregarded entity, use your SSN. Fit Small Business content and reviews are editorially independent. We may make money when you click on links to our partners. Credit Karma is committed to ensuring digital accessibility for people with disabilities. We are continually improving the user experience for everyone, and applying the relevant accessibility guidelines. If you have specific questions about the accessibility of this site, or need assistance with using this site, contact us. You might receive a request for more than one W-9.

Completing the W-9 Form

Don’t fill it out until you have more information. If you were recently hired for a job, confirm with the employer where the form is coming from and why they need it. If you received the form digitally, contact the source and ask for more information. If they refuse to answer your questions or give you vague answers, don’t give them your information. One way to do this is to ask your employer what types of tax documents they plan to send you so you know what to expect.

  • But when you’re a contractor or self-employed person, income taxes work a little differently.
  • If you behave like a corporation at the state level but are taxed like a partnership or sole proprietorship at the federal level, you’re likely an LLC!
  • Business owners can also request Form W-9 from contractors as needed between the end of the year and the 1099 filing deadline.
  • If you are an independent contractor, you must report your name, provide your Social Security number, and verify whether you are exempt from backup withholding taxes.
  • Securities and Exchange Commission as an investment adviser.

Your unique TIN must be submitted with all of your tax forms so that the IRS can easily identify your tax information. We think it’s important for you to understand how we make money. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

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Form W-9 is a really simple IRS form with precisely one function. It lets you send your Tax Identification number —which is your what is a w9 tax form Employer Identification Number or your Social Security number —to another person, bank, or other financial institution.

what is a w9 tax form

The instructions on IRS Form W-9 are straight forward. If you are an independent contractor, you must report your name, provide your Social Security number, and verify whether you are exempt from backup withholding taxes. If the contractor is not exempt from backup withholding, the business must withhold income tax from their contractor’s pay at a rate of 28 percent and send it directly to the IRS. The business entity is required to report the name of their business, what type of business it is, and their tax identification number. If you are self-employed, this is your social security number.

Who Must Complete the W-9 Form?

Both cardholders will have equal access to and ownership of all funds added to the card account. These provisions limiting your liability do not apply to debit transactions not processed by MasterCard or to unregistered cards. Fees apply when making cash payments through MoneyGram® or 7-11®. When you use an ATM, in addition to the fee charged by the bank, you may be charged an additional fee by the ATM operator. See your Cardholder Agreement for details on all ATM fees. See Online and Mobile Banking Agreement for details. If H&R Block makes an error on your return, we’ll pay resulting penalties and interest.

what is a w9 tax form

For example, most freelancers should submit a W-9, but they won’t necessarily end up getting a 1099-NEC, such as if you pay them less than $600 in the calendar year. UpCounsel is an interactive online service that makes it faster and easier for businesses to find and hire legal help solely based on their preferences. We are not a law firm, do not provide any legal services, legal advice or “lawyer referral services” and do not provide or participate in any legal representation. The distinction between W-9 and 1099 tax forms lies in who provides them and what kinds of financial and tax information each form contains. W9 forms are also used for Form 1098 for home mortgage interest, 1098-E for student loan interest, and 1098-T for tuition. Individuals are generally not exempt from backup withholding. Corporations are exempt from certain payments including dividends and interest, unless they fall into one of the exceptions.


We’ll assign one of our tax professionals to you and they’ll give you advice on how to proceed. As an employer, it’s your responsibility to retain a contractor’s Form W-9 in a safe place. Have an ITIN or SSN is valid for three calendar years from the date it is signed unless https://www.bookstime.com/ a change in circumstances makes any of the information on the form incorrect. For example, a W-8BEN signed on September 1, 2014, without an ITIN or SSN remains valid through December 31, 2017. (Calendar Year #1 is 2015; Calendar Year #2 is 2016 and Calendar Year #3 is 2017).

  • Most employers will pay independent contractors solely non-employee income for services provided, though all the other categories listed qualify as 1099 income if paid out.
  • It can also be used as proof that you do not need to file an information return.
  • 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.
  • They need to determine the right form based on their type of business and purpose.
  • See Online and Mobile Banking Agreement for details.
  • The contractor or freelancer is subject to a $50 per-attempt fee if they fail to comply.

If you’re doing business, don’t have a business partner, and haven’t incorporated your business, you’re probably a sole prop. If someone forgives or cancels a debt you owe them, they’ll need to file Form 1099-C with the IRS. They’ll need you to send them a completed W-9 to complete the process. Some certified public accountants consider it best practice to ensure the completion of Form W-9 by payees before issuing any payments. However an employer may still send Form W-9 to have the information on record that the payee doesn’t need to be sent Form 1099.

Relax—run payroll in just 3 easy steps!

If completing your W-9 as a business, use this line to provide the information. If you’re a guest on “Ellen” during her “12 Days of Giveaways” promotion, and the talk show producers ask you to fill out a W-9 before you leave, it’s safe to assume the request is legitimate.

  • Please check with your employer or benefits provider as they may not offer direct deposit or partial direct deposit.
  • Call us and we’ll create a strategy to help you avoid debt and maximize your deductions.
  • Here’s a closer look at whether you should choose H&R Block or TurboTax.
  • This article is for employers who work with independent contractors and need to know about the appropriate tax-related forms to complete.
  • This form accounts for unique tax withholding rates and foreign treaties.
  • Individuals may use their EIN or SSN as a sole proprietor with a registered DBA name or single-member LLC entity name for a small business.