Easy way for independent contractors to never get confused with W-9

Some of people, who ever experienced freelance have simply quit – maybe it’s not that easy to comprehend all changes that follow worker status alternation. For instance dealing with new work papers. It might be confusing to see W9 doc at first glance.

To keep you afloat, here are top 5 freelance question:everything you wanted to know, but were afraid to ask.

To be or not to be – that is the question

If your boss is asking for personal information once you’re getting a job as an employee – this is a no problem requirement. However, once independant contractor finds out that some of the document being filled out are not reported to IRS – they are stuck with the question if they really need to complete blank. There’s a small chance of getting refusal to send TIN at the point.

Regardless the circumstances, we advise to not ignore the request.

Meeting with strangers

What can be more confusing than to receive W-9 request from stranger? Re: free job, Dear freelancer, mailer John Doe and PDF attached are surely some of the signs that can make you think twice before answering back. Some people have never met person they are working for. Are there any ways to prove that you are not being robbed?

Browse the name of the enterprise online, compare letterhead info with the one you got on email. Try to contact the person that sent e-letter. If it’s a small firm you may ask for Skype meet up.

Are there any W-9 form penalties?

No one should be surprised by the fact that each person is obliged to follow the law. Be prepared for:

  • Civil penalty $50 charge for each try to provide TIN in case you failed.
  • $500 for data falsification
  • Criminal penalty damage

It’s highly recommended to double check all data.

Money withholding can be a real issue

If you ever wondered why you need to be aware of backup withholding when completing tax papers, here’s the short answer. There are few ways to become one of those lucky people who have their money hold back. In case you are a subject, IRS will notify you via mail. It’s important to state your status when completing W-9 blank.

Are there any exceptions? Yes, there are cases when you can avoid it when dealing with government organizations, charity, financial institutions, corporations and trusts. Payees are considered nonexempt by the gov unless they specifically otherwise in the tax form.

TIN, SSN and ITIN – what to choose for filling

Wether you have to fill out W9 online or in paper – make sure you know what is being asked.
Part one states that you may input either 9 figures of SSN or TIN. Sole proprietors with EIN may simply use it for the purpose. You may also apply for TIN and state that you are waiting to get it ready.