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What is a Form W-9?

Posted By Jim On 03/24/2011 @ 7:43 am In Taxes | 8 Comments

If you’ve started doing some work on the side, chances are you’ll have run into the Form W-9 [3]. 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 [4] 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 [5]. 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 [6] (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.


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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/form-w9.html

[3] Form W-9: http://www.irs.gov/pub/irs-pdf/fw9.pdf

[4] Form I-9: http://www.uscis.gov/files/form/i-9.pdf

[5] Form 1040: http://www.bargaineering.com/articles/tax-form-1040-1040a-1040ez.html

[6] obtain an Employer Identification Number: http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

Thank you for reading!