Think twice before filling W-9 — maybe you don’t have to

There are certain situations when individual has to complete W-9 blank, therefore not each hired person has to do it.

Purpose the document

It ensures a company with main information about taxpayers who work there. US citizens and resident foreigners, trusts, enterprises and other business entities do not have taxes restrain from their incomes have to complete this blank.

If a taxpayer doesn’t complete and turn back the paper or applies wrong or incomplete TIN, any funds paid to him can be subject to backup restrain. In this case, the firm would refrain 28% of the revenue of ratepayer and send restrain part to IRS. This process to provide the paying of appropriate taxes, even if their payer wasn’t correctly identified.

When W-9 is required?

A business has to get this printable form from any person or company for which it will be necessary applying some information return to the IRS. For example, some business employing an independent contractor to implement the design of new site of the firm will probably need to apply a 1099-MISC doc to IRS to inform how much money web designer got doing his job.

In order to apply 1099-MISC completed, the company needs freelancer’s information such as name, TIN, address, and etc. The firm will require free W-9 form from the contractor to receive that information. The same way, businesses will often ask the document from supernumerary people to get the information is needed for reporting about their expenses to the IRS.

Independent Employees and Household Workers

An independent employee can implement some work at some enterprise for many years but not be official employee. Plenty of household helpers are in the same category as well. Internal Revenue Service determines household employees, for example babysitters as actual employees and should be taxed as well, so they have to download the blank to complete it.

  • Freelancers
    Freelancers who implement short-dated projects for hirers. These are the individuals who perform certain job as photographers, providers or musicians — or who work on some projects. They aren’t those hired people who are involved in regular or long-term job. They have to use the fillable blank but only if their salary at least $600.
  • Consultants
    A consultant specializes in replying a certain questions or helping someone with giving advice about different situations. It can be a marketing expert or a designer. This person can meet with a client once or couple of times to share particular knowledge about in field he is well-versed at. A store might call an expert to improve staff skills or profitability. An individual is free to employ a financial adviser to get helping hand in planning strategy investment or retirement outline. Workers of such type have to use W-9.
  • Corporations & LLCs
    Relying on IRS, corporative contractors don’t have to use the paper as they don’t need 1099 doc as well. However, restricted liability firm contractors, will need the blank if they apply it as individual entity instead of as a corporation.