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What is a W-9 form and how to fill it out?

The local, state and federal governments require collecting taxes from the citizens and businesses operating within their borders every year. In 2019, more than $3.5 trillion was collected at the Federal tax level. Imagine all of that raw data that has to be manipulated and moved to complete this process. 

In an effort to save money for the taxpayers, the government created the W-9 form. It is a tax document that verifies certain information and helps keep track of the income produced by citizens around the country. It is an essential tool to operating the federal budget. 

What is a W-9 form?

The W-9 form is used by the IRS (Internal Revenue Service) to confirm a person’s name, address, and TIN (taxpayer identification number) for employment or other income-generating purposes. This confirmation is collected for both citizens and those defined as resident aliens. It is often a method to control the illegal use of immigrants as employees in specific industries.

Anyone operating as an independent contractor still fills out a W-9 or files as some form of entity when completing their taxes. It is because the W-9 can be used to generate a 1099 tax form. Strict privacy restrictions are surrounding the release of this information to protect individuals and employers.

Who has to file a W-9 form? 

Self-employed workers like digital nomads, freelancers, independent contractors, and industry consultants commonly use the form. Anytime you earn more than $600 in the year without being someone’s employee, you are considered self-employed for that income. If your boss sends one to you, they view your role as an independent contractor and not a typical employee. You need to submit one to the IRS when you change your name, business name, address, or tax ID number. Companies that usually send you a 1099 form with tax details at the end of the year also need a corrected W-9 form.

How to fill out a W-9 form?

You can see a copy of the W-9 form pictured here or visit this IRS link for a fillable PDF of the document. There are some simple instructions for filling out the form. The business that hires you should fill out its information and EIN (employer identification number) on its own. You are responsible for the rest.

Line 1 – Name

Fill out your full legal name that matches your tax returns.

Line 2 – Business name

If you have a legal entity, this is where you put its name. Otherwise, leave it blank.

Line 3 – Federal tax classification

Here you define how you, the independent contractor, are classified. You have several options. You can use your SSN (social security number) if you operate under your sole proprietorship and haven’t been registered as any other type of business.

Line 4 – Exemptions

Only fill this out if you are operating as a particular business or entity with a reason for exemptions. If you are an individual, you can leave this blank.

Line 5 & 6 – Address, city, state, and ZIP code

It is the location where your employer will mail your information.

Line 7 – Account number(s)

An optional line to provide any account numbers your employer may need. Individuals may leave this blank.

Part I – Taxpayer Identification Number (TIN)

You either enter your SSN or your employer’s EIN. You use your SSN as an individual or sole proprietorship. If you are a resident alien, you can also use your ITIN (IRS individual taxpayer identification number).

Part II – Certification

It is where you sign and date the form stating you believe all information to be accurate. Remember this is a legal document, and falsifying information could lead to penalties.

W-9 form

The bottom line

That is it! The W-9 is not a complicated form. Half of the document is the instructions to follow as you fill it out. If you have more questions about what to enter, we encourage you to consult one of the H&S Accounting & Tax Services experts. We have years of experience completing IRS documentation and managing the financial and legal proceedings of different entities. Our team is here to provide you with the professional and timely service you need to complete your business.