Form W-9 is one of the easiest IRS forms to fill out, but if tax forms make you nervous, don't worry. We will guide you through the correct way.
Enter your name as indicated on your tax return. Simple, isn't it?
Enter the name of your business or the name "disregarded entity" in case this differs from above. For example, you could be a sole proprietorship, but for marketing purposes you do not use your personal name as your company name. Instead it is a different name. You would enter this name here. As for the disregarded entity part, if you don't know what it is, you probably aren't one. The most common type of disregarded entity is a limited liability company with a single member, and sole proprietorships and limited liability companies are never classified as disregarded entities. Step 3:
What type of business entity are you for federal tax classification: sole proprietorship, partnership, C corporation, S corporation, trust/estate, limited liability company or "other"? Check the appropriate box. If you are not sure, you are probably a sole proprietorship because you would have to file a lot of paperwork to become one of the other entities. Step 4:
Exemptions. You will probably leave these boxes blank. Here are a few exceptions: 1. Payees that are exempt from backup withholding, such as z. B. Companies (in most cases), may need to enter a code in the "Exempt payee" field Enter. Form W-9 instructions list the exempt payees and their codes, and for what types of payments those codes should be used.Companies that fill out a W-9 to receive interest or dividend payments give z. B. the code "5. "
2. Payees exempt from Foreign Account Tax Compliance Act (FATCA) reporting may need to enter a code in the "Exemption from FATCA reporting code" field Enter. None of these boxes apply to the typical independent contractor or freelancer.
Enter your street address, city, state and zip code. What if your home address is different from your business address? Which address should you provide in the W-9 form? Use the address you will use on your tax return. For example, if you are a sole proprietor who rents office space but you file your tax return using your home address, enter your home address on Form W-9 so the IRS will have no trouble matching your 1099s with your 1040 form .. Step Six:
In this optional step, you can provide the name and address of the requestor. You may want to fill in this box to record to whom you gave your tax identification number. Step 7:
The IRS calls this section Part I, which makes you ask what all those steps were that you just completed. Here you will need to provide your company's tax identification number. This is either your individual social security number (SSN) if you're a sole proprietorship, or your employer identification number (EIN) if you're another type of company. Now, some sole proprietorships also have EINs, but the IRS prefers that sole proprietors use their SSNs on Form W-9. Again, it will be easier to match any 1099 you receive with your tax return you file under your SSN. What if your business is new and does not have an EIN? You can still fill out Form W-9. The IRS says that you apply for your number and "applied" for it should write in the space provided for the TIN. You should get this number as soon as possible because you are subject to withholding until that time. To apply for an EIN online, visit the IRS site here. For more information on backup withholding, see the instructions for Step 8, Part II.
In Part II, you must swear that you are not a liar who lies before you can sign Form W-9. Intentionally lying on a tax form could mean you have to pay a penalty or go to jail; the IRS doesn't mess around. Before you sign the Form W-9, here are the statements you must certify, under penalty of perjury: 1. The number provided on this form is my correct tax identification number (or I am waiting to be issued a number).
If you are thinking about filing a "borrowed", stolen or made-up tax number, you might think twice before lying under oath.
2. I do not backup withhold because: (a) I am exempt from backup withholding; or (b) I have not been notified by the Internal Revenue Service (IRS) that I am reporting any interest or dividends due to a failure; or (c) the IRS has notified me that I am no longer subject to backup withholding.
Most taxpayers are exempt from backup withholding. If you have no idea what the IRS is talking about here, you are probably exempt. If you are not exempt, the IRS will have notified you and the company that pays you will need to know because it is required to withhold income tax from your wages at a flat rate of 28% and send it to the IRS. (By the way, you now know another good reason not to cheat on your tax return: You might have to tell a prospective client about it, and that might make the company think twice about you.) Point (c) basically says that if you Once they are subject to backup restraint, but no longer are, no one needs to know that. It is basically the same as item (a). Click here to read details about backup withholding from the IRS.
3. I am a U.S. citizen or other U.S. person.
If you are a resident alien, you are in the clear. The IRS also considers the following to be "U. S. Person" means a partnership, corporation, enterprise, or association formed or organized in the United States or under the laws of the United States; a domestic estate; and a domestic trust. If your company is a partnership with a foreign partner, special rules apply. read about them in the instructions to form W-9s. If you are not a U.S. citizen, you may need to file Form W-8 or Form 8233.
4. The FATCA codes entered on this form (if any) indicate that I am exempt from FATCA reporting.
You probably don't have to worry about this matter, which is related to the Foreign Account Tax Compliance Act.
A few other things to do before you sign
The form advises you to strike item 2 above if you have been notified by the IRS that you are currently subject to backup withholding tax because you have not reported all interest and dividends. Your tax return.
You may eliminate item 2 if you are completing a W-9 in connection with a real estate transaction. Item 2 does not apply in this case, so it does not matter if you are subject to a backup withholding.
Now, if you read the fine print in the W-9 instructions carefully, it seems to indicate that most people will not need to sign this form at all. You generally only need to sign this if the IRS has notified you that you previously provided an incorrect TIN. Technicalities aside, the person who asked you to fill out the W-9 will probably consider it incomplete or invalid if you didn't sign it, and good luck trying to convince them otherwise.
Return the form
Return your completed W-9 to the company that asked you to complete it. Ideally, you would deliver it in person to limit exposure to identity theft, but this method is often not practical. Mail is considered relatively secure. If you must email the form, you should encrypt both the document and your email message, and triple-check that you have the correct email address for the recipient before sending your message.