How To Fill Out W 9 Form As Independent Contractor

All independent contractors must fill out form w 9 about the author kevin johnston writes for ameriprise financial the rutgers university mba program and evan carmichael.

How to fill out w 9 form as independent contractor. If you hire out your services to a business they will need to have your information on file to help prepare their returns. If you ve made the determination that the person you re paying is an independent contractor the first step is to have the contractor complete form w 9 request for taxpayer identification number and certification this form can be used to request the correct name and taxpayer identification number or tin of the worker the w 9 should be kept in your files for four years for. Correctly filling out form w9 for all independent contractors if you used to be an employee of the company and now an independent contractor then the reporting form to the head will change for you. Irs forms 1099 misc and w 9 go hand in hand.

A w 4 form is meant to set up the employee s backup tax withholdings while the w 9 makes the contractor responsible for their withholdings on their own. You can t fill out and issue forms 1099 misc to your vendors and independent contractors unless you first obtain a completed form w 9 from each of them. Those who should fill out a w 9 are those who are working as independent contractors or freelancers because the w 9 is the form used by the irs to help gather information about such workers. Fill out a w 9 for every client for whom you complete work.

You must know the name address and taxpayer identification number of each vendor or contractor who requires a form 1099 misc and form w 9 supplies you with this information. If you work as a freelancer or independent contractor most of your clients should ask you to complete irs form w 9 request for taxpayer identification number and certification this form helps. If you re an independent contractor consultant or another type of self employed worker the company you re providing a service for will ask you to complete internal revenue service irs form w 9 if your total compensation for the year will exceed 600 the company will use that form to complete its form 1099 nec which reports to the irs the amount of income it has paid to non employees. Employees fill out w 4 forms and independent contractors file a w 9.

The w 9 form is an informational reporting tax form meaning that it provides information to the irs about taxable entities. Since these payments to contractors must be recorded to the irs having a contractor fill out a w 9 allows businesses to issue a 1099 misc form to the contractor at the end of the year. Whereas the w 9 collects information solely for the client or business the 1099 misc form is what a contractor receives at the end of the year that reports their income to the irs. This is why contractors are cheaper for businesses.