Who is required to fill out a W-9 form?

Here is it: you landed your first freelance or consultant job and got really excited about it. You might be already in your planning what you are going to do with the reward, but when it came to money, the organization suddenly asks you to complete a W-9 before paying you.

It may sound strange and unknown to you, but actually there is nothing to worry about because a W-9 is simply a formality to keep tabs on taxes and, in some cases, avoid backup withholding from the payments. Anytime a business pays an independent contractor a sum exceeding $600 throughout a tax year, this fillable blank comes into action. On the whole, a W-9 is an easy-to-get downloadable blank which eases business for both parties.

Categories of self-employed workers

W-9s are designed for all kinds of self-employees so that companies using independent workforce could keep track of their external matters. You can visit the IRS site and find a 2018 printable W-9 form yourself to get acquainted with the structure. The blank is not sent directly to the IRS and used to collect information on an annual report in 1099-MISC which shows non-employee compensation issued to not officially hired contractors. The problem is businesses cooperating with outside workers cannot withhold income or pay taxes like Medicare for them as they do for hired employers. The IRS, however, wants to stay informed on how much independent contractors receive for their services to ensure freelancing vendors pay the dues they owe, so the latter download a W-9 form, detail it and claim incoming money. Here is the brief list of vendors who may undergo this process:

  • Consultants. If a person has consulted with some organization, then they are obliged to go through the blank and provide personal information for each company they consult with. Consultants advise on PR, products and come in to deal with troublesome situations.
  • Freelancers. Short-term projects sometimes need people to perform specific work which is of a rare occasion. In this case businesses may bring in freelancers for a limited period without employing them.
  • Repairmen. Even if you have been cooperating with the same company for a long time to, say, repair equipment, a business still must require a W-9 blank from you any time the work is carried out. If you provide your services occasionally, it is convenient to have an editable W-9 at hand.

A W-9 is not for employees

Full-time hired individuals are not the ones to take care of W-9 blanks. When you are classified as an employee, you fill out another form – W-4. Information for W-9s is processed only for independent workforce who are not listed in an organization as official workers. Some employers might be trying to avoid taxes, so always pay close attention to which blanks firms ask to fill out not to get extra payments out of your own pocket.