The W-9 Form is one of the many forms requested by the IRS (Internal Revenue Service) for those who are self-employed. For example, if you are an independent contractor, it is not always necessary to fill out the W-9 form for employees, as it depends on the amount of annual salary you receive.
What is the W-9 form?
As mentioned above, the W-9 form is a document that is used by self-employed workers to show the IRS all the information about service providers, such as the name of the company or person in charge, their address or tax identification number.
IMPORTANT: This form should be completed only by employers of a business.
How to obtain the W-9 form?
You can obtain your W-9 form from the same company where you work and provide services, or from the financial institution where you have an account or applied for a loan. These are the agencies in charge of providing you with the IRS form for you to complete with the required data.
If you are an employer, you can download the form so that your employees can fill it out and send it to you with their data. To do this, go to the official IRS website, we provide you with the link so that you can download it directly.
Who must fill out the W-9 form?
If you are an entrepreneur or business owner and you pay your self-employed employee more than $600 a year, you should ask your employee to fill out the W-9 form.
This way, you will be able to keep a record of all the payments you made to the employee, and, in addition, it serves to file taxes. To do this, as an employer, you will need to gather all of your employees’ W-9 forms and fill out your 1099-MISC form.
On the other hand, you may be asked for this document when buying or renting an apartment. Also, financial institutions, such as banks, may ask you to fill out the W-9 form in order to inform the IRS about the amount of money you receive for dividends and interest, or when you need to open a bank account, apply for a loan or a credit card.
How to fill out a W-9 form?
If you have received a W-9 form and need to complete it, don’t worry, it is a fairly simple process and not stressful at all. To avoid possible mistakes, which could cost you dearly, just follow the steps below.
- Enter in box 1 your full name, just as it appears in your tax return.
- Enter your employer’s identification number.
- In this first part, you will see a line where you must enter your Social Security Number (SSN).
IMPORTANT: Do not forget that both the SSN and your name must be the same as the ones registered with the IRS for your tax return.
4. In spaces 5 and 6 you must fill in your address, which, like the previous data, must be the same as the one that appears on your tax return.
It is worth mentioning that, in case you are registered as a company, you must complete section 2 with the legal name of the company.
What are the most common mistakes when completing the W-9 form?
Many times, we can make mistakes, as it is not a big deal since we are human, but you have to be extremely careful when completing the W-9 form, since, as we mentioned before, these mistakes in tax returns can cost you dearly.
In fact, there are mistakes that can even land you in court, even if it was an unintentional mistake. This is why we recommend that you check your W-9 form as many times as necessary to avoid these possible errors.
At irsofficenearme.com we have prepared a list for you so that you can avoid the most common mistakes that people make when filling out the W-9 form. Let’s take a look at some of the most common mistakes below:
- Mistakes when spelling your name or DBA (Doing Business As), if you are a business. These mistakes could end up in an audit because, to the IRS, you would not have reported your tax return on your 1099-MISC form when you send it in later.
- Email address errors. It is important that you verify that your e-mail address is correct, since you will later receive the 1099-MISC form through this means. This is why, if you misspelled your e-mail address, you will not receive the PDF of the form.
- Typing errors when entering your Social Security Number (SSN) or Employer Identification Number (EIN).
REMINDER: Your employee will not be aware of these errors, as he or she does not have access to verify the data you have entered on the W-9 form.
Recommendations for correctly completing the W-9 form
- We recommend that you save all the forms in the same folder in your computer, since, if you need to verify any of them, it will be easier to find it.
- Make sure you have entered all the information correctly to avoid possible problems, even with the courts.
- Once you complete your information properly, you will be able to make sure that the payments are reported to the IRS correctly and without errors.
- In case you have doubts regarding any of the fields to complete, we recommend that you consult a specialized financial advisor.
Frequently Asked Questions
When should I update my W-9 Form?
It is your duty to update your W-9 form whenever there are changes in your personal information, which may be your name or business name, Social Security Number (SSN) or Employer Identification Number (EIN), e-mail, address, telephone number, etc.
What do I do if I received a W-9 form by mistake?
While it is not a common occurrence, you may receive a W-9 form by mistake. If this happens, it is probably by fraudulent entities or individuals. This means you will not receive your money.
In case you receive a form from a suspicious source, or if you have doubts about it, the best thing to do is to contact a tax specialist or an accountant, who will be able to solve this problem for you.