If you’re working with a freelancer, independent contractor, or small business owner, you probably have some work to do this January. When you are filing your taxes, it is easy to forget some details that will make the process easier on you, one of those things being the W-9 form. The W-9 form is a simple IRS form to verify a worker’s tax information. It is a precursor to reporting the actual payments made and will not be sent to the IRS.
What is W-9 Form?
A W-9 form is also called a “request for taxpayer information” form. Anyone who needs to provide details about their Tax Identification Number (TIN) and mailing address must submit this form. If you have any income from your business related to services rendered, you must fill out a W-9 form for the person paying you.
It has sections like contact information (primary contact information like name and address), TIN (social security number or the employee identification number), and certification(where a person signs to verify the validity of the information given in the form).
Why Should You Fill Out W-9 Form This January?
The purpose of the W-9 form is to obtain tax information about a vendor. The W-9 form is the basis for preparing another form known as the 1099 form, which is used to report the amount paid to the vendor.
A company must file an information return when it pays a non-employee or other entity more than $600 a year. This form is not to be confused with the W-4 form used for company employees.
All required information is gathered directly from the vendor on a W-9 form to ensure the data returned is accurate. While a company collects information from its vendors using a W-9, it has to submit a 1099 form using this information.
Who Should Fill the W-9 Form?
The most common situations where the W-9 form must be filed.
- A contractor, freelancer, or consultant who will receive more than 600$ from a single client this year.
- A bank can request a W-9 when opening a new account
- Someone canceling your debt might request a completed W-9 so they can file 1099 with the IRS.
Deadline to File W-9 Form
As the W-9 form need not be sent to IRS, there is no deadline for collecting the form. It is more for a company to collect accurate information from taxpayers. Moreover, this information is used to submit the 1099 form, which has a deadline of January 31st. Many companies start working on W-9 papers in December and early January so that they have enough time to send out 1099 forms.
If you need any help filing 1099 forms or processing W-9 forms, contact Kats Bookkeeping. Small businesses in Peoria and Knoxville, IL, can rely on us for a full range of bookkeeping services, from invoicing to financial reporting to fixed asset management.Schedule an appointment today!