Detailed Guide to Completing Form W-9: How to Fill Out and What For?

Being an independent contractor has its advantages, but it also comes with much more personal responsibility; especially, as far as reporting your earnings is concerned. In this post, we will talk about Form W-9, how to fill out W-9 form, how and when to file it.

W-9 Form Online

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How Does a W-9 Work

The W-9 form is a document created by the IRS for reporting taxpayer information to entities that have the right to collect such data. The form is not sent to the IRS but forwarded to the party that requested it.

Companies need the information reflected in a W-9 form to report to the IRS the exact amount of compensation paid to non-employees in the past tax year.

The W-9 form needs to be filled out by an independent contractor who performs services for the company on an as-needed basis, without being employed by it.

You need not worry about how to fill out a W-9 as an independent contractor if your earnings from a particular company did not exceed $ 600 over the duration of a single year.

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How to Get a W-9 for My Business

Now that we understand who needs it, let us see how to get a W-9 form. Most often, the company that contracts you to perform certain services will issue a blank W-9 form and ask you to complete it.

If an independent contractor does not receive the said form from the company that employed their services, he or she may download the form from the official IRS website.

In rare cases, the company may issue a form of its own that is in a substantial way similar to the standardized W-9 form and features all the same certifications. To know more, read our article on how to get a W-9 form.

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How to Fill Out W-9 Form

As long as you understand how to obtain W-9, it is time to talk about how to complete a W-9 form correctly. Although many people are anxious when it comes to completing W-9 forms, the process is very uncomplicated. Moreover, there is not much difference between how to fill out W-9 as LLC and how to fill out W-9 form for an individual.

First, you specify your name and the name of your business if you have one. Then, select the federal tax classification that applies to you, which can be an individual, a sole proprietor, an LLC, etc.

If you are not an individual/sole proprietor, the Exemption section is the next one you will fill out. The first line is for entities that are exempt from backup withholding. It must be filled out with a number or letter code that explains the reason for exemption. The second line in this section is for entities that hold their accounts outside the US and are therefore exempt from reporting under the FATCA regulations.

Next, you will be asked to provide your full address so that the employer can mail your information returns. The Account numbers line is for when you need to inform your employer about any account numbers that you have.

In Part I of the W-9 form, you will need to provide your Social Security Number (SSN) or Employer Identification Number (EIN). The former is for individuals and single-member LLCs, and the latter is for multi-member corporations and partnerships. Sole proprietors are free to choose either one of the two. A resident alien is to provide their ITIN here. Part II is for signing and dating the document.

Furthermore, if you’re wondering how to fill out a w9 for a child, you’ll find that it is no different than doing it for an adult. When filling out a W-9 form, a minor will have to specify their name and TIN. The form can then be either signed by the minor himself/herself or by their legal guardian.

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How to File a W-9 Form

The entity that requested the W-9 form should provide you with a blank copy of the document, which you then fill out and return. There is no deadline for filing a W-9 form. You do it after each chargeable event like receiving payment for the services you provide in the capacity of an individual contractor, paying mortgage interest, or depositing money to your IRA account.

If you struggle to understand how to fill out W-9 for LLC or need detailed instructions on how to complete W-9 as an individual, get in touch with your tax advisor or reach out to the IRS directly.

Common Mistakes to Avoid When Completing Form W-9

There are a couple of common mistakes that people often do, but it's always better to notice them before you file the form:

  1. Providing an incorrect Taxpayer Identification Number (TIN), such as a Social Security Number (SSN) or Employer Identification Number (EIN) that does not match the name on the form.
  2. Failing to sign and date the form.
  3. Indicating the wrong entity type, such as selecting "Individual" when the entity is a corporation.
  4. Failing to provide an exemption reason when claiming an exemption from backup withholding.
  5. Providing a wrong address.
  6. Using a fictitious business name when the individual is doing business under a different name.
  7. Entering incorrect information if the form is being filed by an agent, nominee, or custodian.
  8. Filling a wrong form, for example, providing a W-8 instead of a W-9.
  9. Not updating the form if any information changes, such as a change in address or TIN.
  10. Not providing the form in a timely manner when requested by the requester.

Try to avoid these errors in your filing process.

Frequently Asked Questions

When you know all the benefits of the paperless office solution, it’s much easier to make this choice. Here you will find some questions about this topic.

How much taxes will I pay on a W-9?

For the income, which is reflected in the W-9 form and is liable to backup withholding, the IRS currently sets the flat rate at 24%.

How does a W-9 affect my taxes?

Providing incorrect information on a W-9 form or not reporting some types of income will lead to backup withholding at a rate of 24% being applied to the earnings payable to you.

How to fill out a W-9 as an independent contractor?

Enter your name and business name, if applicable. Specify your business entity according to the federal tax classification. People exempt from backup withholding and reporting under the FATCA regulations should enter a code in the corresponding boxes. Provide your correct address and zip code. Date and sign the document.

How to fill out a W-9 for a business?

In the ‘Name' box, provide the name you or your business use when filing for taxes. If not already mentioned in the top line, the second line is for your business name. Select the correct classification for your business. The Exempt Payee box is only for when your business isn’t required to have backup withholding. Enter the full legal address. In Part I, provide EIN or SSN if you do not have EIN. Sign and date in Part II.

How to fill out W-9 for the landlord?

The landlord may ask the renter to fill out the W-9 form to handle their security deposits properly. The completion process is the same as the one described above.

How to send a W-9?

There is no trick to how to file a W-9 form. You can deliver it to the requester in person, send it via regular mail or courier post office, or email the filled-out form.

How long is a W-9 good for?

There is no expiration date on a W-9 form. You only need to update it in time if the information you provide here changes.

How to fill out a W-9 online?

You can fill out and submit a W-9 form online using special software that allows uploading, processing, and electronically signing such documents.

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Dmytro Serhiiev
Tax Consultant & Co-Owner at PDFLiner