By Daria Uhlig
Here’s what you need to know about the W-9 form, one of the most common tax forms.
What Is a W-9 Tax Form?
Form W-9 is the Request for Taxpayer Identification Number and Certification form. If a payer must file an information return to the IRS to report payments made to or by you, they’ll likely ask you to complete the form.
What Is a W-9 Tax Form Used For?
A W-9 form provides the information third parties need to complete information returns they file with the IRS.
When Do You Need To Fill Out a W-9 Form?
Any non-employee who is receiving pay and classified as a U.S. citizen or resident alien will need to fill out a W-9 form and give it to the person responsible for filing an information return, such as a 1099, to report the payments to the IRS.
One of the most common reasons you need to fill out a W-9 is that you’re self-employed. You’ll use the form to provide personal information, including your taxpayer identification number, so that the hiring agent can report to the IRS all of the money they pay you over the course of the calendar year.
In this case, the hiring agent uses details on the W-9 form to complete Form 1099-NEC, which it files with the IRS. You also receive a copy so you can accurately report the income when you fill out your income tax return.
Here are other times when you might have to fill one out:
You pay mortgage interest, and your mortgage company reports the payments on Form 1099-INT.
You receive dividends from stocks or other investment income, and your broker reports those payments on Form 1099-DIV.
You sold investments through a broker, and your broker needs to file a 1099-B to report your short-term and long-term capital gains and your capital losses.
You have income from prize winnings that the contest organizer reports using Form 1099-MISC.
You’re selling a home, and the closing agent needs to report the proceeds you receive using Form 1099-S.
A creditor is forgiving or canceling your debt and needs to report the amount forgiven using Form 1099-C.
You own a rental property managed by a property manager who collects rent on your behalf and must report the rents submitted to you using Form 1099-MISC.
What Is the Difference Between a W-2 and a W-9 Tax Form?
W-2 and W-9 forms serve different purposes. A W-2 is a wage and tax statement employers use to report employees’ wages and tax withholdings. For example, employers typically withhold federal and state income tax as well as Social Security and Medicare tax. When you receive your W-2 at the end of the year, you use the information to fill out your tax return.
A W-9, on the other hand, collects information that helps a third-party payer report payments to the IRS. The payer uses the information from your W-9 to file a 1099 form with the IRS.
So while a W-2 is not at all like a W-9, it does serve a similar purpose as a 1099 because W-2s and 1099s are both information returns. The difference is that an employer completes W-2s for its employees, and a third-party payer completes 1099s for non-employees.
How To Fill Out a W-9 Form
These step-by-step instructions will guide you through filling out the form:
Line 1: Fill in your name as it appears on your tax returns.
Line 2: Enter your business name if it’s different from the name you entered on line 1.
Line 3: Select the federal tax classification for your business. The classifications include business structures such as individual/sole proprietor, C corporation, S corporation, partnership, limited liability company and trust/estate.
Line 4: Fill out this section if you’re exempt from backup withholding. Payments to independent contractors are usually not exempt, according to the IRS, nor are dividends, rents, royalties or gambling winnings.
Part I: This section is for your taxpayer identification number. If you’re an individual or sole proprietor, you may use your employer identification number if you have one; otherwise, use your Social Security number. You can also use either type of tax ID if you’re a single-member LLC that’s disregarded as an entity separate from you.
Part II: You’ll fill out this section to certify that the information you’ve provided is correct and that you’re not subject to backup withholding. Read the fine print in this section — it has some less-usual circumstances that might affect how you complete the form. Once you’re confident that you’ve filled it out correctly, sign on the line labeled “Sign Here” and enter the date.
The IRS issues penalties for false or incorrect information on W-9 forms, so be sure you’ve accurately supplied all the information requested.
Do I Have To Claim a W-9 on My Taxes?
No. A W-9 simply provides information your payer needs to complete a 1099 form reporting their payments to you. However, you might have to claim the income reported on the 1099 on your taxes.
Where Can I Get a W-9 Form?
You can get a W-9 from the following sources:
Your payer
Tax preparer
The IRS website
