During tax season there are so many IRS form names and numbers flying around: 1099, W-2, 1040, Schedule C, W-9…how are we to know who needs what?! In hopes of clearing up some of the confusion, today we will look at one of these, the W-9. You will learn the what, who, where and when of the W-9.
WHAT
A W-9 is the ‘Request for Taxpayer Identification Number and Certification’. It is an informational form used to gather information about service providers paid by the company. It isn’t submitted to the IRS or any other governing body. It is kept on file at the company. The company uses the information on the W-9 to help complete a 1099 (more on the 1099 next week). This form gathers information about the service provider such as name, address, business structure and identification number.
WHO
Who sends/gathers the form W-9? Businesses who pay service providers are required to obtain the W-9 before submitting the year end 1099 reports. Many businesses withhold payment until the service provider submits the form. This is a way to assure the form is completed and submitted by the service provider. There are penalties from the IRS for not providing the form.
Who receives/completes the form W-9? Any service provider that a 1099 is required for (again, I’ll explain this further next week) must complete and submit a W-9 to any business they have provided services to. In short, these are service providers that you have paid over $600 in the year.
EXAMPLE: As an accountant, I provide services to numerous clients. I must provide them with a W-9 for them to keep on file. On the flip side, I have hired a cleaning service (ok, only in dream land, but for this example we’ll go with it), I must obtain a W-9 from them to have on file at my office. For my business, it works both ways.
WHERE
A printable version of the W-9 form is available directly from the IRS website. You can print this and mail it to the service provider, or even have them print it and mail it directly to you (to save time).
WHEN
There is no actual deadline for receipt of the W-9. The form 1099, that you need the W-9 to complete, is due to the service provider on January 31. So you need to have the W-9 in enough time to complete that requirement.
Many small business owners are on both sides of the W-9 requirements. That is just one more reason we need to have a full understanding of it. This is one of the more simple forms to complete and obtain. So now you can go forth and get those W-9 complete!