The IRS Form W-9, known as the Request for Taxpayer Identification Number and Certification, is utilized by organizations to collect tax data from third parties. The information on the form gives businesses insight on what to include in their Forms 1098 or 1099.
The 2023 W-9 form helps the IRS determine the amount of taxes owed by independent contractors or freelancers who offer their services to a business. This form exempts the business from having to pay taxes on behalf of these independent workers. It may also be referred to as the “Request for Taxpayer Identification Number and Certification.”
Who Asks for a Completed W-9?
The entity paying you must ask you to complete a W-9 Form, but they are not obligated to submit it to the IRS. They will retain the form for their records and use the information to prepare tax returns such as 1099 and 1098 Forms and to decide if federal tax withholding is required on the payments you receive.
W-9 Form: Who Has to Fill It Out?
IRS Form W-9, Request for Taxpayer Identification Number and Verification, is intended for the use of solitary practitioners such as freelancers, self-employed individuals and Independent Contractor. It is mandatory to use this form in case you have getting paid for more than $600 in a given year without being considered as a permanent worker. The company may have considered you as an independent contractor if they provide you with a W-9 rather than a W-4. It is advisable to verify with the employer to make sure of your categorization. Having a clear understanding of your status can assist you in the preparation of your tax declaration.
The Request for Taxpayer Identification Number and Certification, or IRS Form W-9, gives businesses the capability to monitor their freelance or external labor force. Instead of submitting the W-9 form to the Internal Revenue Service (IRS), it is sent to the manager or the personnel department of the company. In the event that an individual has multiple engagements with various businesses, they may be required to complete multiple W-9 forms within the same year. Furthermore, any changes made to personal information such as the name, business name, address or tax identification number will necessitate the submission of updated W-9 forms.
When Should You Ask for a W-9?
It is very important to request a W-9 form from any contractor or freelance worker you intend to pay before commencing any job or project. This form should be submitted by the worker prior to the start of the work relationship. Neglecting to request this form beforehand may lead to potential difficulties in the future.
Therefore, to avoid having to pay any withholding taxes on payments made to the contractor, it is advisable to inquire about the W-9 form before starting any work. This way, you can ensure that you have all the necessary information on hand.