Key Takeaways

  • A W-9 form is essential for LLCs providing services to other businesses and is used for tax reporting purposes.
  • LLCs must provide a W-9 when requested to avoid backup withholding of 28% on payments.
  • Different LLC classifications—single-member, partnership, C-corporation, and S-corporation—require different tax treatments on the W-9.
  • Single-member LLCs (disregarded entities) may use the owner's Social Security Number (SSN) instead of an EIN in some cases.
  • Understanding when an LLC needs to provide a W-9 and how to fill it out correctly ensures compliance and prevents IRS penalties.
  • Certain payments, such as those for goods rather than services, may not require a W-9.
  • Using an EIN instead of an SSN can help protect privacy when filling out Form W-9.
  • The W-9 should be kept up to date and resubmitted when business information changes.

A W-9 for an LLC is used for financial reporting purposes, including mortgage interest income, non-employee income, and the cancellation of debt. The information on this form is then used to fill out Form 1099. Companies of all sizes require a completed W-9 from the companies with which they do business.

Businesses need to have the correct taxpayer identification number, the TIN, or the employee identification number, the EIN.

Because your LLC is likely not only to be a service provider but a user as well, it must file information reports, or 1099s, as well as receive them. Your LLC needs a W-9 from all its businesses and service providers, which includes other LLCs.

EIN and Certification

For the W-9, you will need:

  • The legal name of your LLC
  • The “doing business as” or DBA name
  • Your current address
  • Your TIN or EIN. 

The owner or another authorized representative signs the W-9 to verify that the information is accurate and truthful. 

You should keep the completed and signed W-9s on file to send to payers or customers, if requested. You may also want to include a copy along with an invoice when the invoices for a customer exceed $600 in one calendar year.

Single-Member LLCs and W-9 Requirements

A single-member LLC (SMLLC) is treated as a disregarded entity by default unless it elects to be taxed as a corporation. When filling out Form W-9, the IRS requires a single-member LLC to use the owner's Social Security Number (SSN) or Employer Identification Number (EIN) rather than the LLC’s EIN. The name of the individual owner should be listed first, followed by the LLC name.

For tax purposes, payments to a single-member LLC are often reported on the owner’s personal tax return. However, if the LLC has elected to be treated as an S-corporation or C-corporation, it should indicate this classification on the W-9.

Withholding

Only corporations are exempt from 1099 reporting and Form W-9. This means your LLC must complete a W-9 if it's requested. If you don't comply, any payments your LLC received may be subject to backup withholding. Without your W-9, the payer can withhold 28 percent of the money paid to your LLC and remit those amounts to the IRS.

When an LLC Is Required to Provide a W-9

Many businesses wonder, Does an LLC need to provide a W-9? The answer is yes—if a business requests a W-9 from your LLC, you are legally required to provide it. Form W-9 is used to report non-employee compensation, including payments for freelance work, independent contractors, and certain vendor services.

LLCs must provide a W-9 when:

  • They provide services to another business and expect to receive more than $600 in a tax year.
  • A financial institution requests it for reporting mortgage interest, dividends, or other taxable income.
  • They engage in certain real estate transactions.
  • They receive debt forgiveness that needs to be reported to the IRS.

However, LLCs that only sell goods (rather than provide services) generally do not need to provide a W-9, as these transactions are not typically subject to IRS reporting requirements.

Form W-9 LLC Classifications

LLCs can choose between several types of classification for federal taxation. Some of these require the LLC's members to choose their taxation by completing an IRS form. Others provide default taxation that depend on the LLC's members. Your classification will need to be indicated on Form W-9.

If your LLC is owned by a business, like another LLC, it's best to speak with a tax attorney, a CPA, or other tax professional.

Filling Out the W-9 for an LLC

To correctly fill out a W-9 for your LLC, follow these steps:

  1. Line 1: Enter the legal name of the LLC or the individual owner's name for a single-member LLC.
  2. Line 2: Provide the LLC’s trade name or "doing business as" (DBA) name if applicable.
  3. Line 3: Check the correct tax classification—C-corporation, S-corporation, partnership, or disregarded entity.
  4. Line 4: Enter any exemptions from FATCA reporting (rarely applicable for most LLCs).
  5. Line 5 & 6: Provide the LLC’s business address.
  6. Line 7 (Optional): If applicable, enter an account number for the payer's reference.
  7. Part I: List the LLC’s EIN (or the owner's SSN if a disregarded entity).
  8. Part II: The authorized representative must sign and date the form, certifying the accuracy of the information.

To maintain compliance, businesses should keep a signed copy of the W-9 on file and ensure it is updated if any business details change.

C-Corporation

If you file Form 8832, Entity Classification Election, your LLC is considered a C Corporation in terms of taxation. Your C-corporation W-9 will need to be completed in the first 75 days of your business start or in the first 75 days of the new tax year, if you've already been in business for that time.

C-corporations file Form 1120 to report their business income and expenses. Owners of a C-corporation receive regular paychecks, which means their earnings are reported on Form W-2. 

If you filed Form 8832, or you file Form 1120 for your business, check the “Limited Liability Company” box on Form W-9 and write “C” as the classification.

Privacy Considerations When Submitting a W-9

LLC owners concerned about privacy may prefer to use an EIN rather than their SSN on the W-9. While single-member LLCs classified as disregarded entities may list the owner’s SSN, applying for an EIN can help protect against identity theft.

To obtain an EIN, businesses can apply through the IRS website, which issues an EIN instantly upon completion. This ensures that sensitive personal information is not unnecessarily shared when submitting W-9 forms to multiple clients or payers.

S Corporation

Your LLC is regarded as an S-corporation when you use IRS Form 2553, Election by a Small Business Corporation, to choose federal S-corporation taxation. 

The W-9 form for an S-corporation needs to be completed within the first 75 days of your business formation. If you have been in business over 75 days, the W-9 form must be completed within the first 75 days of a new tax year.

S-corporations file Form 11205 to report business income and expenses. An officer of an S-corporation receives a W-2 income from the company, as well as a K-1 statement. This statement records the profits or losses that passed through that officer each year as an individual. 

If you filed form 2553, or your business files Form 11205 to report the income, you'll check the “Limited Liability Company” box on Form W-9 and write “S” as the classification.

Partnership

If your LLC has more than two members, it automatically becomes a partnership in the view of the IRS. These LLCs must file Form 1065 to report business income and expenses. Each partner will also receive a K-1 statement each year to report his or her share of the partnership income or loss on his or her personal Form 1040 income tax return.

If you file Form 1065 to report income, you'll indicate “Limited Liability Company” on Form W-9 and choose “P” as its classification.

Common Mistakes to Avoid When Filing a W-9

Incorrectly completing Form W-9 can lead to IRS penalties or withholding issues. Avoid these common mistakes:

  • Using the wrong tax classification: LLCs should ensure they select the appropriate tax entity (C-corporation, S-corporation, partnership, or disregarded entity).
  • Providing the wrong TIN: A single-member LLC must use the owner's SSN or EIN if disregarded, while multi-member LLCs must use the EIN.
  • Failing to update information: If the LLC changes ownership, names, or tax classification, a new W-9 must be submitted.
  • Not signing the form: An unsigned W-9 is invalid and may result in backup withholding.

Keeping records up to date and verifying the accuracy of W-9 submissions ensures smooth transactions and compliance with IRS regulations.

Frequently Asked Questions

  1. Does an LLC need to provide a W-9?
    Yes, an LLC must provide a W-9 when requested by a business or financial institution for tax reporting purposes, particularly when receiving more than $600 in payments.
  2. Should a single-member LLC use an EIN or SSN on Form W-9?
    A single-member LLC should use the owner's SSN unless it has obtained an EIN and elected corporate taxation.
  3. Can an LLC refuse to provide a W-9?
    No, refusing to provide a W-9 can result in backup withholding, where the payer deducts 28% from payments to the LLC and submits it to the IRS.
  4. What happens if an LLC provides incorrect information on a W-9?
    Incorrect information can lead to penalties or IRS inquiries. Businesses should update and submit a new W-9 if any details change.
  5. Does an LLC that only sells goods need to provide a W-9?
    Generally, no. A W-9 is typically required for service-based payments rather than the sale of goods.

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