Instructions for Filling out Form W-9

Triston Martin

Jun 30, 2022

Suppose you are self-employed or work for yourself as a freelancer or independent contractor. If a business pays a freelancer or independent contractor a cumulative amount of $600 or more during the year, the business is required to submit information returns using Form 1099-MISC. Your customers will utilize the information that is provided on your W-9 to compile the 1099-MISC form that they will submit about you. This form will include your name, the name of your company, your address, and your taxpayer identification number (TIN). In late January, after the end of the tax year, they will fax one copy of the 1099-MISC form to the Internal Revenue Service and will fax another copy to you. Among the other scenarios in which you could be requested to fill out a W-9 form are the following:

  • Certain real estate transactions
  • Mortgage interest paid
  • Purchasing or giving up a piece of land
  • Debt discharge or cancellation
  • Payments made to an individual retirement arrangement (also known as IRAs)

Request for Taxpayer Identification and Certification, Form W-9:

Even while completing Form W-9, which is one of the simplest documents required by the IRS, may make you anxious, there is no need to be. We will guide you through the steps necessary to finish it correctly.

Step 1. Enter your name

The first step is to enter your name exactly as it appears on your tax return.

Step 2. Input the name

If the name you submitted for step 1 is different from the name you supplied for your company or "disregarded entity," you will need to input that name here. For instance, you could have a sole proprietorship, but in order to avoid confusion with potential customers, you might not refer to your own name when referring to your company; rather, you would say that you are "doing business as" a different name.

Step 3. Select business organization

For federal tax categorization, what kind of business organization are you: a sole proprietorship, partnership, C corporation, S corporation, trust or estate, limited liability company, or "other"? Mark the relevant box with your selection. If you are unsure of your business structure, it is likely that you are operating as a sole proprietorship since becoming one of the other legal companies would have required you to submit a significant amount of paperwork.

Step 4. Boxes that should not fill up

Exemptions. There is a good chance that you will not fill up any of these boxes. The following are a few notable exemptions:

  1. Payees exempt from backup withholding, such as companies (in most situations), would be required to provide a code into the box labeled "Exempt payee code." In the instructions for the Form W-9, the exempt payees and their respective codes, as well as the different kinds of payments for which these codes should be utilized, are listed. When completing their W-9 forms, companies that have received interest or dividend payments, for instance, should add the code "5."
  2. Payees who are exempt from reporting financial transactions under the Foreign Account Tax Compliance Act (FATCA) may be required to submit a code in the box labeled "Exemption from FATCA reporting code." The average person working as an independent contractor or freelancer does not fall into any of these categories.

Step 5. Fill out the address

You will be asked to provide your street address and city, state, and zip code. What should you do if the address of your company is different from the address of your home? In order to complete Form W-9, what address should you provide? Use the address that will appear on your tax return after you fill it out.

Step 6. Fill out tax identification

It is a discretionary step in which you may supply the name and address of the person making the request. This form will include your name, the name of your company, your address, and your taxpayer identification number (TIN). It is highly recommended that you fill out this box to maintain a record of your tax identification number to whom you have issued it.

Step 7. Provide the tax identification number

The Internal Revenue Service refers to this portion as Part I, which has made you question what all those stages were that you just finished. In this section, you will need to provide the tax identification number for your company. This number will either be your personal Social Security Number (SSN).

Step 8. Affirm that all information

Affirm that all of the information you have provided is accurate. If you knowingly provide false information on a tax return, you may be subject to severe penalties, including even incarceration. The Internal Revenue Service does not take such offenses lightly.

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