Form W9 is a simple IRS form with one function. It allows you to send your Tax Identification number (TIN) which is your Employer Identification Number (EIN) or your Social Security number (SSN) to another person, bank, or other financial institution.
Form W9 – What Is It and How Is It Used?
Form W9 is an IRS form for providing necessary information to a person or company which will be making payments to another person or company. One of the most situations is when someone works as an independent contractor for a business. When you are hired as a contractor for a business or beginning work as a freelancer, you may be asked to complete a W-9 and give it to the business which will be paying you.
If you have your own business or work as an independent contractor, freelancer or gig worker (in other words, self-employed), a client may request that you fill out and send a W9 so they can accurately prepare your 1099-NEC form, report the payments they make to you at the end of the year and know whether or not you are subject to backup withholding.
- Form W9 gives personal identifiable information to a person or business used for reporting income paid to self-employed people like independent contractors, vendors, freelancers or other customers.
- The person or business you do business with uses the W9 to collect several of your personal information like your name, address and taxpayer identification number (Social Security numbers for individuals and employer identification numbers).
- Usually, you will submit a W-9 when you engage in most taxable transactions which need reporting to the IRS.
Who Asks for a Completed W9 Form?
The person or business paying you is responsible for asking the W9 form from you. But the requester has no obligation to file the W9 with the IRS. That person will keep the form on file and use this information to prepare other returns, such as 1099 Forms, 1098 Forms, and to determine whether federal tax withholding is needed on the payments you receive.
Who Needs to Complete W9 Form?
Usually, you will submit a W9 form when you engage with a company where reporting information to the IRS might be necessary, such as receiving the payments for services you give as an independent contractor, paying interest on your mortgage or contributing money to your IRA account. The individual or business you are doing business with uses the W9 to collect several of your personal information, the most important of which is your taxpayer identification number (TIN).
How to Complete W9 Form?
You are able to download the W9 form from the IRS site. To complete W9 form, you need to give information for the following lines and parts:
Line 1 – Name
If submitting this W9 form as an individual, you have to enter the name shown on your tax return. If you have already changed your last name without informing the Social Security Administration (SSA), please enter your first name, the last name as displayed on your Social Security card and your new last name.
If you have applied for an individual taxpayer identification number (ITIN), you are able to enter your name as you entered it on your Form W7 application. Also, this should match with the name entered on Form 1040.
If submitting as a sole proprietor or single-member LLC, you have to enter your individual name as shown on your 1040/1040A/1040EZ. You are able to enter your business, trade or “doing business as” (DBA) on line 2.
If you complete the form as a Partnership, multiple-member LLC, C Corporation or S Corporation, you have to enter the name on line 1 as shown on the corresponding tax return as well as the business, trade or DBA name on line 2.
Line 2 – Business Name
If completing your W9 form as a business, you have to use this line to give the information.
Line 3 – Federal Tax Classification
Depending on your situation, you are able to choose the most appropriate federal tax classification on line 3 for the name entered on line 1. Please check just one box on line 3 of the W-9. Some types of individuals and businesses can fill out Form W9.
Line 4 – Exemptions
If you complete Form W9 as an individual, you do not need to worry about filling out this section. Particular businesses and organizations are exempt from backup withholding in certain instances and need to fill out this line. If any of these apply to your situation, you will need to give a number or letter code representing the reasons behind creating this declaration.
Individuals and businesses which are exempt from backup withholding will give a code corresponding to the reason they are exempt. In most cases, corporations and businesses are going to be exempt from backup withholding.
Lines 5 and Line 6 – Address, City, State and ZIP Code
This is going to be the address where the person or business will mail you your 1099. The address, city, state and ZIP code will go into Lines 5 and line 6.
Line 7 – Account number(s)
If you need to give the person or business paying you with account information such as a bank or brokerage account which pertains to the request for the W9.
Part I – TIN
In this part, you are going to give your taxpayer identification number. As an individual, this is going to be your Social Security Number or single-member LLC. Also, it can include your employer identification number if you are a multi-member LLC classified as a partnership, C Corporation or S Corporation. If you operate as a sole proprietor, you can include one of the numbers. If you live in the United States as a resident alien and thus are ineligible for a SSN, you are able to use your IRS ITIN.
Part II – Certification
You sign and date the form in this section, stating the information you have already given is accurate to the best of your knowledge. You need to cross out Item 2 of the certification if you are subject to backup withholding for failing to report all interest and dividends on your tax return. Your certification states that you are a United States citizen, other United States person or resident alien. If you are preparing your W9 as a joint account, just the person whose TIN shows in Part I must sign.