W9 for LLC: Everything You Need to Know
A W-9 for an LLC is used for financial reporting purposes, including mortgage interest income, non-employee income, and the cancellation of debt. 3 min read
3. Form W-9 LLC Classifications
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.
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.
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.
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.
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.
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.
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