What is a W-9 Tax Form?

The W-9 is a form used by the Internal Revenue Service (IRS) to collect information about non-employees and business entities that are required to report income. A completed W-9 form helps the IRS determine the amount of taxes that must be withheld from payments made to the individual or business. It’s very important for businesses to have accurate and up-to-date W9 forms on file for all of their independent contractors and vendors, as the information provided on these forms is used to establish tax liability and compliance.

Who Needs to Submit a W-9 Form?

The IRS generally requires any person or business that is subject to U.S. income tax withholding to submit a W-9 form. So, if you are a contractor, a freelancer, or a vendor providing services or products to a business, you will likely be asked to fill out and sign a W-9.

Additionally, if you operate a business entity like a limited liability company (LLC) or a corporation, you may be required to submit this form as well. When businesses make payments to unincorporated entities, they must emit backup withholding if the entity does not have an up-to-date W-9 form on file.

What Information Is Required on a W-9 Form?

The most important information that must be provided on a W-9 form is the taxpayer’s name, address, and taxpayer identification number (TIN). The TIN can either be a Social Security number (SSN) for individuals or an employer identification number (EIN) for businesses.

In addition to the taxpayer’s information, the form will ask for a certification regarding the taxpayer’s status as it relates to backup withholding. This means that a vendor must certify that it is not subject to backup withholding and that its address and TIN information is correct.

What Happens After a W-9 Is Submitted?

After a W-9 is submitted to a company, it will use the information to prepare a 1099-MISC at the end of the year. A 1099-MISC is an IRS form sent to report payments made to independent contractors and other non-employees. This form will show how much money was paid out to the taxpayer during the year and will serve as proof of income when the taxpayer files their taxes.

The company will also use the information on the W-9 to determine the amount of taxes that must be withheld from payments to the taxpayer. The company is ultimately responsible for reporting the payments and withholding to the IRS.

Conclusion

The W-9 is an important form that must be completed by individuals and businesses when payments are received from other businesses. The information provided on the form is used to determine tax liability and to report payments to the IRS. If you are a freelancer, contractor, or vendor being paid by a business, make sure to get a W-9 form from the payer, fill it out accurately, and submit it promptly.