What is a Form W-9?

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If you’ve started doing some work on the side, chances are you’ll have run into the Form W-9. As is the case with any form that has the letter W, this one has to do with wages. The Form W-9 is like the Form I-9 except it’s for independent contractors, not employees. This distinction is important for the employer because the rules are different for contractors.

The Form W-9 is a single page form that’s very straightforward. Your employer will use this information for the purposes of taxes (calculating withholding, filling out your 1099-MISC, etc.) and other HR related issues. This form doesn’t get sent to the IRS, which is noted in the upper right corner.

Tax Classification

The only tricky part is the box where you check your tax classification. Most people will be individuals or sole proprietors. Anyone can be a sole proprietor, you simply claim income on your Schedule C of your Form 1040. If you are a sole proprietor, you enter your Social Security Number in the Part I: Taxpayer Identification Number (TIN) field. Leave the Employer identification number field blank.

If you are a corporation, and this requires that you file a form with your state, and you have an EIN, you’ll be filling out the EIN field in the Part I section. You can’t claim to be an LLC or other corporation without filing paperwork with your state first.

Tips for Form W-9

One of the fun parts of running a personal finance blog is the paperwork. I’ve filled out my fair share of Form W-9s to send to companies I do work for. My advice is that you obtain an Employer Identification Number (EIN) (skip the Form SS-4, you can do it online now). Normally you fill out a Form W-9 with your Social Security Number but since this is likely for business purposes, I recommend you get in the habit of using an EIN instead of your SSN. This segregates your personal life from your business life and it’s just better to use an EIN over your more secretive SSN.

Next, download the Form W-9 and fill it out as usual, including signing it and dating it. Now scan it into a PDF and put it in a secure location. Whenever someone requests a Form W-9, give them this scanned version. I’ve been using the same scanned Form W-9 from 2007 without a problem. As long as the information is correct, companies will usually ignore the date.

By doing it this way, you save yourself about 15 minutes each time and it’s less paperwork to deal with.

{ 8 comments, please add your thoughts now! }

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8 Responses to “What is a Form W-9?”

  1. scdavid says:

    Great suggestion about scanning it and saving as a PDF. Very handy!

  2. lynn says:

    I’ve been thinking about getting an EIN but I thought I didn’t qualify for one. I guess I could set up a Keogh plan…

  3. skylog says:

    i’ll say it again, i am loving this series. learned another thing today.

    great ideas about the EIN as well as the pdf. i do this very same idea with several forms i regularly need to fill out. i do have one question though, what is the process for obtaining an EIN? i like the idea of keeping things separate, but never really knew about obtaining an EIN.

  4. Rob C says:

    I’m a little confused here. Technically, not everyone can be a sole proprietor because this means you own a business. If you are simply a contractor, you do not own a business.

    Also, you cannot set up an EIN unless you operate your business as a corporation or you have employees. This is straight from the IRS.

    • Ann says:

      Wrong. Self-employed contractor = files taxes on a Schedule C = is/owns a business as far as the IRS is concerned, regardless of whether you are incorporated or have any additional employees besides yourself.

  5. Melissa says:

    I have a question…I have my LLC and I just obtained a Fed ID number. I am trying to keep my LLC separate from my personal life. I am also a one person LLC who does not sell products or services. I created a website to simply help provide people information for FREE…however, someone may want to advertise or sponsor an ad on my website. Do I claim myself as an individual/sole proprietor on the W-9 or as an LLC because I am not a C or S Corporation…nor am I a partnership since I am on my own. Also, when entering a tax ID number on the W-9…can I just enter my Fed tax ID number instead of my personal SSI number. The form suggests you enter your SSI. I am just struggling to fill this form out correctly and not be subjected to additional corporation and state taxes since I am not really a corporation. Please help…I have spent lots of time on-line and on calls with the IRS and the Dept. of Revenue and I am still not sure how to do this the “right” and “best” way. Thanks so much. Melissa

  6. Melissa says:

    One more question…is it possible to fill out a W-9 for a company who is wanting to help provide money that is not for profit or services (although I am an LLC) and not be taxed on that amount of money provided to me? This money would be used toward an event. Would the company categorize that money as a gift or would I be taxed on that amount of money that would be never see or use since it would be put toward an event. Could the company just file my W-9 to keep on record only and not send me a 1099-Misc since there was not a profit? Thanks again.

    • Ann says:

      If they want a thorough paper trail with W9 etc, you could file a Schedule C with the money received as income as reported on a 1099-Misc, report all the expenses it went towards as expenses to be subtracted from the taxable income, and end up not having any taxable income remaining from it (so no taxes owed on it) if it was indeed all spent on the event.

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