IRS W9 form is used by businesses delivering report about contract agreement between vendors and freelancers.
It’s not sent to the IRS directly, but maintained via individual who conducts the information return in case of verification purpose.
Paper requires obligatory fulfillment if freelancer gets gaining for more than $600 annually.
W-9 form play important role in several cases:
- Internal Revenue Service gets information about contractors who paid for tax purposes.
- If freelancer is liberated from backup withholding — business has to get withhold 28% of the payment and providing IRS with it.
- Some financial institutions need freelancer’s records in case of reporting other income types or interest.
Material filled includes full name plus ratepayer identification data (EIN or Social Security Number), amount of payment. Business enterprises use W-9 form data when filling 1099 Miscellaneous Income paper.
Particular attention has critical importance when following filling instructions. Important to give a careful perusal when receiving print W9, it might take a few minutes of read over.
Safety precaution required since certifying IRS means that data provided is complete and accurate. The worst case scenario includes signing paper with wrong information that can lead to administrative offense.
Filling out the document before requesting any payments from employer used as common practice. Otherwise, $50 penalty withdrawn.
There are no deadlines for document fulfillment but companies often try to avoid 28% withholding so they hold payment until individual provides W-9.
If you haven’t printable W-9 form
Usually individual gets a W-9 from vendor, but it’s possible to see electronic version before dealing with printable one. Electronic version has to be verified for correspondence with printable one.
In case of receiving unexpected W-9 request you should contact your vendor.
The general requirements for the document are the same for all states, but some of them have additional points that require extra attention.