With more and more work going to contractors, freelancers, gig workers and others who are self-employed, you might find yourself needing to fill out an IRS Form W-9 if you want to get paid for part-time work you do or goods or services you sell. You might need to fill out a W-9 for other tax reasons. Understanding how to fill out a W-9 form will help you do this correctly and make sure you get paid on time.
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What Is a W-9?
A Form W-9 provides companies information about the non-employees they pay so that they can properly submit tax information about their contractors to the IRS. It contains your tax identification number (which is often your Social Security Number) or your employer identification number (if you are working through a company you own).
You will also need to provide your personal name or business name and the type of filer you are (individual or a specific business type, such as a sole proprietorship). It's a very simple form that should only take a few minutes to fill out.
Unlike a Form W-4, which helps employers determine how much tax to take out of employee pay each check, a W-9 does not result in a business taking taxes out of your payments. You receive the total sum of the contract you negotiated with the business, but you will have to pay your taxes on that money if you have an income tax liability at the end of the year.
Depending on your situation, you might have to make quarterly estimated tax payments to the IRS, rather than waiting until April 15 to pay all of your taxes at once.
Read More: Independent Contractor Tax Deductions
Who Requests These Forms?
Businesses that pay vendors, suppliers, gig workers or contractors, need to collect Form W-9 from these people or businesses if the person or business is paid more than $600. For example, if you provide bookkeeping services for a small business each month, you would need to fill out a W-9. If your business makes a one-time sale of $1,000 worth of uniforms to a school, the school might ask you to fill out a W-9.
You wouldn't need to give a homeowner a W-9 if you are their landscaper because the homeowner is a private person, not a business required to report your income to the IRS. You, as the business owner, would need to report your income to the IRS. Only companies that need to report certain types of vendor and supplier payments need to collect W-9s, explains TurboTax.
You might also need to fill one out if you pay interest on a mortgage or contribute to an IRA.
Read More: What if I Made a Mistake on my Taxes?
W-9 Form: How to Fill Out
Start by reading the "General Instructions" section at the bottom of the W-9. Next, go back to the top and fill in your name or business name. For example, if you are a graphic artist and your company is Ratkowski Design, you would fill out your W-9 as "Ratkowski Design." If you are simply doing a job for a business as a side hustle, you can fill out the W-9 as Dave Ratkowski.
Next, check the box next to your filing status. Your choices are Individual/Sole Proprietor/Single Member LLC, C Corporation, S Corporation, Trust/Estate, Limited Liability Company or Other. If you choose Limited Liability Company (because you have multiple owners of the company), read the directions under that selection to see if this is the correct choice for you. If you choose Other, see the instructions for this choice.
Fill in your complete street address; you can't use a P.O. Box number. In Part I of the form, enter your personal tax identification number or your company's employer identification number, referred to on the form as either TIN or EIN. In Part II of the form, sign and date the W-9.