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 sorry.

I’m new to business: what’s W-9?

This document is completed by people who have completed some work, the full amount for services which exceeded 600 dollars a year. This means that if a person was paid for each visit or the milestones do not exceed 600, but if total sum gets above that – printable W9 blank should be kept by the employer. It’s perfectly normal to fill out a form before getting paid.

Business Relations

The most important rule is establishment of good relations between business partners, in this case between the contractor and the employer. Specify in advance the positions on which work will be carried out and performance capacities. Whether performer has the status of an employee or a temporarily hired person. Warn the future worker that he or she is obliged to provide the taxpayer’s number or social security number.

How to find shared language

One of the frequent problems in any relation is understatement of any kind. Many experienced employers probably remember the case when due to the understatement of the duties or roles, the job statements changed during the performance. For example, if the contractor itself sent out 1099 or W9 form to US tax authorities with wrong data. Individual approach should be as usual deal as settling up quarterly report.

In order to make yourself safe

If you held some work without subscribing a single piece of paper from the employer, there is still a chance to indicate this in 1099 before the deadline for submission of applications for participation (end of February) is knocking at the door. Just clarify that the supplier did not specify the tax identification number in 1099 and you become free from fee that could’ve been charged not only to employer but also employee.

Defy the law

Business must provide fillable W9 form to freelancer, but if individual provided service for a Limited liability company, it is not necessary because the employer does not necessary need to send out 1099. Keep in mind that this exception does not apply to all companies and if you still received a return request is better to fill documents on time.

Best practices provide the best protection

If you think that it’s too hard or almost impossible to ask every freelancer to fill in the necessary documents, then remember the case when you saw how someone had to prove something in court, for example, when even a small detail could save the defendant from losing a significant amount of money.

In any case it is your choice to expose even those who work less than $ 600 per year in paper work but surely, this way by consolidation the bounds with signatures you inform future tax audit and clients first of all about the status of honesty and security as an enterprise and thus strengthen the attitude to your business.