What is Tax Form W-9: Request for Taxpayer Identification Number and Certification?
Tax Form W-9 is used to request the taxpayer identification
number (TIN) from any person or corporation you plan to do business with.
For small businesses, it’s common to send a W-9 to anyone
you intend to file a form 1099 for at
the end of the year. The W-9 lets that person know that you intend to report
how much you paid them and allows the person to give you all the information
you need to file a 1099 correctly.
So, if you are hiring an independent contractor, go ahead
and send them a W-9. When they return the form to you, make sure it includes
their name, business name (if applicable), address (so you know where to the
send the recipient’s copy of the 1099), and TIN. The TIN can be either a social
security number (SSN) or employer identification number
(EIN). Also, verify that they’ve signed the form certifying that
everything is correct.
What do I do if a contractor doesn’t fill it out?
If you’re entitled to a person’s TIN, they could be fined up
to $50 per instance of not filling out a W-9. To make sure you’re not fined for
failing to include a TIN on a 1099, ask the contractor for their TIN at least
Form W-9 is similar to Form W-4
that you receive from your employees because you don’t need to send it to the
IRS. Instead, keep it for your records and use the included information to
create and file your 1099 forms at the end of the year.