IRS Form W-9

IRS Form W-9 is a request for the Taxpayer Identification Number (TIN) and certification. The TIN can be a Social Security Number (SSN) or an Employer Identification Number (EIN). This form is essential for any entity that is required to report certain types of income, such as non-employee compensation, dividends, and interest payments, to the IRS.

Individuals and entities who are not employees but receive income from a business typically need to complete a W-9 form. This includes:

• Independent contractors and freelancers
• Consultants
• Vendors
• Landlords
• Recipients of prize money or awards
• Partners in a business partnership

The W-9 form is crucial for tax reporting purposes. It helps businesses accurately report the income paid to non-employees. The information collected on the W-9 form is used to complete various tax forms, such as Form 1099-MISC, Form 1099-NEC, and Form 1099-DIV. These forms are then submitted to the IRS and provided to the income recipient to report their earnings on their tax returns.

Filling out Form W-9 is relatively straightforward. Here are the steps:

1. Enter Your Name: Provide your full name as shown on your tax return.
2. Business Name (if applicable): If you are operating under a business name, enter it here.
3. Federal Tax Classification: Indicate whether you are an individual/sole proprietor, C Corporation, S Corporation, Partnership, Trust/estate, or a Limited Liability Company (LLC).
4. Exemptions: If applicable, enter any exemption codes.
5. Address: Provide your address, including street, city, state, and ZIP code.
6. Taxpayer Identification Number (TIN): Enter your SSN or EIN.
7. Certification: Sign and date the form to certify that the information provided is accurate.

Foreign entities completing Form W-9 outside the United States can consult IRS guidelines on international business entities for specific classification instructions.

To ensure your W-9 form is correctly processed, avoid these common mistakes:

• Providing an incorrect TIN
• Failing to sign and date the form
• Using a business name that doesn't match IRS records
• Not updating the form when your information changes

The completed W-9 form should be submitted to the entity requesting it, not to the IRS. Businesses must keep these forms on file for at least four years to comply with IRS regulations. It’s important to store the form securely to protect the personal information it contains.

‍

IRS Form W-9 and Backup Withholding

If the taxpayer fails to provide a correct TIN, the payer may be required to withhold a percentage of the payments as backup withholding. This amount is sent directly to the IRS. The current backup withholding rate is 24%.

‍

This article provides general information only and does not constitute tax advice. For the most current guidelines, please refer to the official IRS website or consult a qualified tax professional.