W9 purpose

This tax form is widespread among freelancers and vendors across USA.
Freelancers who receive wage beyond 600 USD yearly shall treat the subject as compulsory implementation.
Information requested includes — name, ratepayer identification number and salary rate. It would be highly recommended to follow filling out instructions.

Main purpose is taxpayer identification number being reported to another business legalizing freelancer’s work.

Prior usage includes:

  • Contractor complete paper thus ISR receives tax information.
  • Individual use fillable W 9 document while completing 1099 Miscellaneous Income paper.
  • Some financial institutions use contractor’s data in case of reporting other income types.
  • When completing this document business provides ISR with 28% withhold in freelancer’s being backup withholding free case.

How W 9 is different from other charge papers?

Company’s employee should hesitate if there’s a request of W9 fulfillment. Due to the big difference between employees and independent contractors, special W-4 official list is used by officially employed workers.

Even though an individual is not considered as freelancer — conducting any work for business company while being non-hired considers as freelance and requires document fulfillment.

The 1099 form is similar to W-9 since it reports amount of contractor’s payment types of income other than wage.

For some non-regular employees there might be problems dealing with this form.
Originally W-9 is used to send name TIN to ISR. Common people use TIN as SSN (social security number). Resident individuals using charge purposes have no SSN. In this case a person has to request ITIN using W-7. Individuals who have an ITIN must provide it on W9.

Does your business need it?

Legible copy of the paper has to be completed by each freelancer that makes more than 600 USD annually due to successful 1099 fulfillment. Even though there might not be a need for 1099 document right now, W 9 should be signed. There are no deadlines for W 9, but there’s always a risk for ISR questioning tax deductions.

Non-profit & government agencies should be especially particular about this because their tax filing is differs.