How to File a W9: Everything You Need to Know
Knowing how to file a W9 is important, as this is a required tax document that must be submitted to the Internal Revenue Service (IRS) every year. 3 min read
Knowing how to file a W9 is important, as this is a required tax document that must be submitted to the Internal Revenue Service (IRS) every year. Specifically, if you work as a freelancer or independent contractor, you must complete a W9. Employers will then use the information on the form to report the employee’s earnings to the IRS and also provide a 1099 form for the employee to calculate his own taxes.
Companies that hire such freelancers and independent contractors don’t have to withhold income taxes from them nor do they need to pay Social Security or Medicare taxes on behalf of such employees as they would for regular employees. The contractors are responsible for these tax requirements. Therefore, the IRS will ask the employee to fill out a W9 and submit to the employer who will then use the form to fill out a 1099 and send back to the employee who will then use the form for their income tax return.
How to Fill Out W9
Below are the steps to take when filling out form W9, which is a straightforward, simple document to fill out. Should you have any questions, you can visit the IRS website to find answers, or review the instruction guide at the top of the W9 form:
- Obtain the form. If you are an employee, then your employer should be providing you with the form; however, you can also print the form directly from the IRS website
- Fill out basic information. Provide basic pedigree information in section one on the form, i.e., full name, address, business name (if applicable).
- Fill out Part I, which will ask for more specific information regarding you or your business.
- Sign the document in Part II.
Part I will ask for your company’s business identification number. You will use either your personal Social Security Number (SSN) or your Employer Identification Number (EIN). Generally, sole proprietors will use their SSN. Other business structures will use their EIN. While some sole proprietors do in fact have EINs, the IRS prefers such business owners use their SSN on the W9 since it is easier to match the corresponding 1099 that the sole proprietor will also file. Even if you operate a brand new business and haven’t yet obtained an EIN, you can still fill out a W9. In order to do this, you should apply for an EIN separately on the IRS website and write the words “applied for” in the corresponding box on the form. Keep in mind, however, that you should try to obtain an EIN immediately as the IRS could penalize you for failing to include a correct EIN on the form.
Thereafter, you will sign and date the form in Part II. Be sure to double-check that all required information is filled out. You should also read through the certification language in Part II. When you sign the document, you are confirming that you have provided accurate and up-to-date information, a proper EIN or SSN, a proper exemption code, confirming that you are a U.S. citizen (non-resident aliens might need to fill out a W8 or Form 8233 instead).
Individuals vs. Businesses
Both individuals and businesses must fill out form W9. There is a separate area within section 1 to input your name and your business. You will need to indicate the type of business structure that you are operating, i.e., sole proprietorship, partnership, C corporation, S corporation, trust/estate, LLC, etc.
When it comes to filling out this form as an individual on behalf of your business, you will need to ensure that you are filling out the correct address. For example, if you are a sole proprietor but rent office space, you will use the address that is used on your personal income tax return, i.e., Form 1044.
Exemptions From Filling Out W9
If you have an exemption, you will also check off box 4 indicating as such.
Below are some of the exceptions:
- Some corporations are exempt from backup withholding; an exempt payee code will be entered on the form
- Those exempt under the Foreign Account Tax Compliance Act (FATCA) will need to enter a FATCA exemption code on the form
The instructions on the W9 form will list exempt payees and the associated codes. For example, corporations filing W9 for the receipt of dividends would enter code number 5.
If you need help learning how to file a W9, or if you are unsure whether or not you need to submit a W9, 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.