Filling Out W9 for LLC: Everything You Need to Know
Filling out a W-9 for LLC is a critical part of filing your limited liability company's taxes correctly. 3 min read
2. Completing the W-9 Form
Updated July 8, 2020
Filling out a W-9 for LLC is a critical part of filing your limited liability company's taxes correctly. This form is used to report mortgage interest income, non-employee income, and debt cancellation to the IRS. Although this form is fairly simple, completing it for an LLC can be challenging. Doing so correctly can prevent tax issues from affecting your business.
Classifying an LLC for Tax Purposes
Because an LLC is not recognized by the IRS as a separate business entity for taxation purposes, these companies can elect to be taxed as either a sole proprietorship (disregarded entity), partnership, or corporation. These elections will determine how your business income is taxed.
If you are the only owner (member) of your LLC, you will automatically be taxed as a disregarded entity (sole proprietorship) unless you opt for corporate taxation. This means that your business is separate from you for legal purposes, but not for taxation.
If you have a single-member LLC and choose to be taxed as a disregarded entity, you will report business profits and losses on your individual income tax return (known as pass-through taxation). If you receive a 1099 for LLC income, you will probably need to fill out a W-9 form for the payer.
When filling out the W-9, check the box under the business name line if you have filed paperwork to be taxed as a C or S corporation. Next to this box, denote either a C or an S depending on which type of corporation you have elected. S corporations offer certain tax benefits, such as the avoidance of double taxation, and can be elected by filing Form 2553.
Completing the W-9 Form
- On the first two lines of the form, enter your full name and the legal name of your LLC. This must match the business name you entered on your state LLC formation documents when you created the LLC.
- Next, check the box for your tax classification as described in the section above. If you are taxed as a disregarded entity, make sure to check the "individual/sole proprietor" box, not the limited liability company box. An LLC with more than one owner is automatically taxed as a partnership and should select the LLC box, denoting the letter P for partnership.
- If you have an EIN (employer identification number), you should enter it on the W-9. This taxpayer identification number operates like a Social Security Number (SSN) for businesses and is required if you have employees, are taxed or operate as a corporation, or are required to file alcohol, firearms, tobacco, or excise taxes. An EIN is free and can be obtained from the IRS by filing online, over the phone, or through the mail with Form SS-4. If you do not have an EIN, enter your SSN.
- Next, enter your full address. Then, you'll need to read the three statements in Part 2 and sign to certify that they are accurate. This confirms that your EIN or SSN is correct as entered, that you are not subject to backup withholding, and that you are a U.S. citizen or taxpayer.
- Send the W-9 to the company that requested it, not to the IRS. The payer will use the information to file its tax return, at which point the IRS will receive a copy.
If you need help with filling out the W-9 form or electing taxation for your LLC, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.