There are numerous tax forms that can be useful for business owners and employees. W-9 form is usually requested when freelancer receives more than 600 USD annually. On its own, form is not sent directly to the IRS, but information from the form is used in other documents. And it may cause some troubles for independent contractors, that have not yet filled the blank.
The main purposes that W9 form serves for are:
- Protection of freelancers and vendors
- Verification of TIN
- Further document use for government and bank affairs any customs purposes
Businesses with hired independent employees do not withhold income levy or pay Medicare or Social Security taxes for hired freelancers so those who have not filled latest updated W9 blank might become responsible for this matter and may receive no unemployment compensation when fired.
Freelancer can explore what kind of information should be filled in before receiving an actual request. Where other are waiting to see printed blank, others can spot it online and be prepared beforehand so all questions such as ‘what is W 9 form’ are already clear.
There are no schedules for W-9 and no deadlines, but individual needs to know the due dates of other documents that use data from W-9. For instance 1099 misc should be completed before January 31st.
Individual needs to indicate: full name, address, business type. Then goes TIN input – Social Security number for inhabitants and assigned TIN for resident aliens.
Certification part is very important, since person is stating that all aforesaid data is correct. Otherwise, signed document contains wrong statements and this can lead to fines and penalties.
There are several cases when individual might get confused. For instance, receiving request for W9 while working as legal employee, not contractor or even getting an unexpected requirement to complete the blank. Such cases are rare, but there’s always a chance of third party organizations’ need for TIN. Even though confidentiality is protected by law, employer or any organization that discloses personal data is going under criminal prosecution.