Ask most savvy business owners or entrepreneurs anything about their industry, and they’ll likely be able to share everything you need to know, and then some. Ask those same folks what a W-9 or other tax form is, and the answer might not come so easily.
No matter your industry or your business’ size, contracted help can be a huge resource. A W-9 makes that help possible. Here’s what you need to know!
What is a W-9?
A W-9 is a simple form that allows contractors to share their information with the businesses for which they perform work. If you’re the business that’s hiring the contractor, requesting the completion of a W-9 form from the contractor is a must in order to ensure you have things needed by the IRS come tax time (like an EIN, social security number, tax ID number, mailing address and more). If you’re a contractor, correctly completing the W-9 you receive is key to ensuring you can adequately file with the IRS and verify the amount of money you made with the business. Though a W-9 form doesn’t get sent to the IRS by either party, it’s an information return that’s crucial to have on file and easily accessible.
When is a W-9 necessary?
Technically, a W-9 is necessary when a contractor performs more than $600 worth of work for a business. However, if you’re a business owner or freelancer that plans to one day hire help to support your business, a W-9 is something you should know about.
W-9s are intended strictly for contractors (non-employees), and should be requested of any contractor you bring on board as part of their onboarding paperwork. If you are that contractor and the business you’re working with does not extend a W9 form to you when you start, it’s important to send one on your own.
If you are the contractor, without a W-9 form it can be extremely difficult for a business to claim your services when they complete their required IRS forms, and it can be hard for you to verify your income should the IRS have questions. The W-9 form is an easy one to complete. You’ve just got to remember to prioritize it!
Quick Tip- When hiring a contractor, make the completion of a W-9 form a requirement before moving forward with the process of working with them and making payments to them. This ensures the task gets completed in a timely fashion.
What information is needed for a W-9?
A W-9 needs the contractor’s full name, business name (if applicable), contact information, and the type of business entity you are. If you’re a freelancer or solo contractor, you’re probably classified as a sole proprietor. Other types of businesses are listed on the form and are pretty easily recognizable.
Once you’ve filled out the requested information, the form has a part 2 that requires nothing more than a signature and a date. You can download the IRS’ W-9 form here, or bookmark this page for easy access when it comes time to send one!
What if my contractor situation is more complicated?
If you’re currently operating as a contractor or have contractors on your team and are not sure how to proceed with W-9s and filing their cousins the 1099s, I’m here to help. As a business solutions expert, I have helped dozens of businesses untangle complex issues and clarify a path to greater profitability.
Check out my FREE guide to The 5 Missteps That Limit Your Business’s Profitability to unblock common barriers to profitability that I observe among businesses.
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Schedule a Discover & Strategize Session for a quick consultation and action steps moving forward!