W-9 form

What Is a W-9 Form?

A W-9 form is a document used in the United States for tax purposes, specifically to gather information about a taxpayer’s identification number. It is typically provided by individuals or entities to requesters, such as employers or clients, who need to report payments made to the taxpayer to the Internal Revenue Service (IRS). The form requires the taxpayer to provide their name, address, and taxpayer identification number (usually a Social Security number or employer identification number). Additionally, the taxpayer must certify their correct identification number and legal status, such as being exempt from backup withholding or subject to specific withholding rates. The requester uses the information provided on the W-9 form to generate Form 1099 reporting income paid to the taxpayer, ensuring compliance with IRS regulations.

Who Is Required to Fill out a W-9 Form?

The responsibility to fill out a W-9 form falls primarily on independent contractors and freelancers who receive payments exceeding $600 from a single business entity in a given tax year.

These individuals are considered non-employees and are responsible for paying their own taxes, unlike traditional employees who have taxes withheld by their employers. The W-9 form helps the paying business obtain the necessary tax identification information (SSN or EIN) to accurately report the income paid to the contractor and issue a corresponding Form 1099 for tax filing purposes.

It’s important to note that while primarily used for independent contractors, there are other situations where a W-9 might be requested, such as receiving certain types of interest income, real estate transaction proceeds, or royalty payments.

What Is the Difference Between a 1099 and a W-9? 

The main difference between a 1099 and a W-9 lies in their purpose and usage within the U.S. tax system. A W-9 is a form used by individuals or entities to provide their taxpayer identification number (TIN) to requesters, such as employers or clients, who will report payments made to them to the Internal Revenue Service (IRS). Essentially, the W-9 collects information needed for tax reporting purposes.

On the other hand, a 1099 is a tax form used by payers to report various types of income paid to recipients, such as independent contractors, freelancers, or other businesses. The 1099 form documents income earned throughout the year, including earnings from services performed, interest, dividends, rental income, and more. Essentially, while the W-9 collects taxpayer information, the 1099 reports income paid to taxpayers to the IRS for tax purposes.

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