First thought that comes to mind would be ‘I wonder why other people were not subjected to money hold back’. Simply – some workers are not subject to the above limitation because they work for the government, financial institutions or other higher authorities that make it possible to avoid subsequent acts.
These rules were invented specifically to protect the organization and you in the future cases. Due to such circumstances from each income earned will have certain percentage (28%) withhold that does not vary depending on the state or place of work. More information can be spotted on W9 online page.
How do I know of my status
There are several ways how to find out whether you are a person who is an issue to above mentioned restriction or not:
- If you do not have a taxpayer number that is not the case
- If you received a message that your status was changed, then most likely it is so. You should trust only to mail that comes from lawyer or IRS.
- If you start a bank account and provide SSN – you convey status directly, that means that bank will be informed you in case you didn’t that status has changed.
- There is always a chance of a mistake: If you provided incorrect information in the past or you for some reason had incorrect data or accidentally IRS itself made a mistake you may fall under the above limitations.
Why W-9 matters
Value of this form is that when getting hired, you must inform boss about current TIN number and name so that he or she can fill out the print form 1999 otherwise the employer informs IRS that you refused or provided incorrect information. You should be prepared that if you can not provide a request for the first time or try to falsify the data – you most likely face the penalty in the form of a fine.
Are there any correct methods of filling out the regular and electronic documents for person that is a subject to withholding? Correct answer is yes. There is a big difference between the two categories of people who meet different requirements. Make sure that you understand what your status means and what consequences can follow if you sign doc with wrong data. Cross out item 2 in the validation part if you are sure that you have 28% of income loss.