Completing Form W9
If you receive a Form W9 you may be wondering why you got it and what to do with it. If you feel overwhelmed by tax forms, this article can help you. We will go over the purpose of a Form W9 and a step-by-step process of how to fill it out.
What is a Form W9?
A Form W9 is a document that confirms your taxpayer identification number. It is necessary when you are going to be receiving a Form 1099 so that your income or losses can be correctly reported to the IRS. However, it does not arrange for taxes to be withheld. In a W9 situation paying taxes is your responsibility.
When You Need a W9
The most typical situation you will fill out a W9 is if you are an independent contractor or a freelancer. Some additional circumstances you may need to complete this form would be:
- Certain real estate transactions
- Acquisition or abandonment of a secured property
- Mortgage interest paid
- Cancellation of debt
- IRA contributions
Now we will take you step-by-step on how to fill out your Form W9.
- Line 1: Enter your name here. It should be the same as how it is listed on your most recent tax return.
- Line 2: If you have a business name you operate under, enter it on this line.
- Line 3: Here you will need to check the box that corresponds to your federal tax classification. Your answer will depend on your business set up.
- Line 4: Typically, you will leave this box empty. You would only enter something here if you had any special exemptions. These are very uncommon to have if you are an independent contractor or freelancer.
- Line 5: Enter your street address here. It should be the same as the one you used on your tax return.
- Line 6: On line 6 put the city, state, and zip code of your address.
- Part 1: Here you will enter your Social Security Number or your Employer Identification Number. If you are a sole proprietor you will use your Social Security Number. Additionally, if you have just filed for your EIN but have yet to receive it you will enter “applied for” in the EIN section.
- Part 2: Here is where you will sign the document. By signing you are stating that the information you provided is correct, that you are not subject to backup withholdings, you are a U.S. Citizen or Resident Alien, and that any exemption codes are correct.
What To Do Next
Once your Form W9 is complete, it is common practice that you return it back to the business that asked you to complete it. Double check your information to make sure everything is correct. This will ensure everything is properly reported to the IRS. If there is anything that you are still unsure of, such as your tax classification, you may need to contact your tax preparer.
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