Form W-9 is a document that businesses use to collect income tax identification information from independent contractors who are being paid $600 or more during a year. As an independent contractor or freelancer, you’ll receive a W-9 form when you begin your work from the company using your https://www.bookstime.com/articles/what-is-fixed-cost services. Then in January, you’ll receive your 1099-MISC form that documents your annual earnings. When you file your federal taxes, attach each of the 1099 forms you have received. W-9 forms are for self-employed workers like freelancers, independent contractors and consultants.
- The information contained in this article is not tax or legal advice and is not a substitute for such advice.
- You may have to fill out Form W-9 if you’re an independent contractor or self-employed worker.
- They will send one copy of 1099-MISC to the IRS and another copy to you in late January, following the end of the tax year.
- However, certain payees are exempt from this and will need to enter the applicable code from the Form W-9 instructions to assert their exemption.
- You will still have to report your earnings to the IRS, and the companies that use your services will have to report those earnings, too.
- The following are not specified U.S. persons and are thus exempt from FATCA reporting.
You will need to fill out a W-4 when you’ve just started a new job as a full-time employee or your financial situation has changed (while still remaining a full-time employee). A W-4 form requires some of the same information as a W-9, like your name, address and w9 tax form meaning Social Security number. Employers use the completed W-4 to determine how much to withhold from your paycheck for federal income taxes. Since an employer doesn’t withhold income tax for contract and freelance employees, W-9 forms don’t request that information.
Potential Problems With the Form
When you’re a full-time employee, your employer withholds some of your income to cover federal income taxes and FICA taxes (which include Medicare and Social Security taxes). The Foreign Account Tax Compliance Act (FACTA) appears on the second prompt of the Exemptions line. Foreign financial institutions are generally required to report payments to, and withhold taxes from payments to their customers that are United States persons. However, certain payees are exempt from this and will need to enter the applicable code from the Form W-9 instructions to assert their exemption.
While it’s relatively simple to fill out a W-9, always double check to ensure your information is complete and accurate. If you are unsure how to fill something out, consider looking for a tax accountant to help you make sense of your taxes. You can enter either your Social Security number (SSN) or your employer identification number (EIN).
Understanding Form W-9, Request for TIN
To report some of this related information to the IRS, independent contractors, freelancers, and other non-employees that received payments should fill out a Form W-9. Any FATCA (Foreign Account Tax Compliance Act) codes on the form are correct. You must sign the certification if you’ve been notified that the previously provided TIN is incorrect,
or there is a problem with the information provided to the IRS at an earlier date.
Another option is to send it through a service such as FedEx, UPS, or the postal service, though there is no guarantee your form will not be lost, stolen, or tampered with in transit. Amy Fontinelle has more than 15 years of experience covering personal finance, corporate finance and investing. When you hear that you need to fill out a W-9, you might think it will be a complicated tax form.