Taxes 101: backup withholding and freelancers

If you are a business corporation occasionally hiring individual contractors, you know that you’re always required to file information returns to the IRS about the amount of money paid to internal workforce throughout the tax year. To collect this kind of data business owners engage a formality known as W-9 Form. This helps to gather taxpayer details for the bigger annual report (1099-MISC) and avoid problems connected to tax evasion. However, newbies to freelance, especially online entrepreneurs, might be unaware […]

Filling out W-9: Step by step guide

Almost everyone involved with independent workforce has to deal with the intricacies of tax papers, especially those who provide services to businesses not as an official employer. Unless you are paid under $600 or operate within some labor agreement or a contract, there’s actually nothing to worry about. But as soon as you become a freelancer, most companies would request you to complete a special blank to identify taxpayer information and prepare further information returns for the IRS. Although it […]

Do household workers need to fill out a W-9 form?

When you operate as a business organization, it is relatively native to differentiate between freelancers and officially hired employees, so there are no questionable moments taxation about and documents to file. However, when you independently hire an in-home worker like a nanny or a ‘seasonal’ plumber, it goes differently, depending on a type of services your household workers provide. Some are considered direct employees while some remain in the ‘freelancing’ zone. Formal procedures for both categories as well as IRS […]

Ignorance is no defense: is vendor obliged to provide W9 to contractor?

If you started to fill out the form 1099 and have just remembered that you do not have the necessary info shat should’ve been obtained from freelancer from the beginning of the job, or if you have worked for a whole year without giving a sign to a single piece of paper, this article will help you to clarify if you are likely to urgently set up meeting with lawyer or consult online. Don’t hesitate since better be safe than […]

They ask me for personal data: what is W-9, how it’s related to 1099 and why I cannot stay aside?

Until April 18, residents of America must pass tax returns (Tax Return). The most important advice at the same time – be careful and do not relax even at the time of sending the declaration by mail, because if the address on the mail envelope is written incorrectly, it is believed that you did not send it on time. 1099 MISC is a form that is sent to anyone who has received more than $600 in income from one source. […]

Expenses write off: housing costs are paid by government?

Anyone can be an entrepreneur – this form of business management is the most simple and affordable. Tax deductions are available for nation, this way expenses are kept at low level and it makes you feel like state supports workers as well as unaffiliated people. Take into consideration that circular calculation is required – to your made up plan deduction/contribution and compensation plan should get along (reduced plan contribution rate was created for the direct purpose ).   Types of […]

You can (not) escape backup withholding?

If you are new to Federal Tax Reports, you can consider yourself as one of the happy few. However, keep in mind one certain note – rents, dividends, commissions – IRS can apply certain rules of hold back rules to any type of income. If you have no eager to be surprised with IRS email – thoughtful examination of W-2 around tax season will help to make sure that reported info is correct. If personal data form your tax report […]

Three main differences between W-2 and W-9

W-2 and W-9 both are used to report about a year’s revenue of a taxpayer to the IRS. However, these forms are completely different and each of them is designated for a specific purpose. Purpose of the W-2 and W-9 forms Form W-2 – this document is used to report about the wage/salary income of a tax reporter, and also about his/her amount of medicare, state andfederal taxes. Form W-9 – this document is used to calculate the payroll of […]

The Calculation of W-9 Income Tax

The fillable W-9 form is an agreement between not the employer and the employee, but between the client and his contractor who finds those employees later. The document has an objective to inform the contractor’s taxable identification number to the IRS so that the business or client can pay the contractor not only his/her wages but also the taxable compensation. As a rule, the income that the contractor earns under the arrangement is not exposed to any income tax withholding. […]