Why Fill Out a W-9 Form?
An S-Corp must fill out a W-9 form if another company requests it to make a payment. The form provides essential information like legal name, address, and tax ID number of the S-Corp. Companies request a W-9 because they need this information to report payments made to the S-Corp on a 1099 form.
To complete the W-9, the S-Corp must:
- Enter its legal name
- Provide its address and tax ID number
- Indicate its corporate status
Contractors and W-9s
Independent contractors working as sole proprietors must also submit W-9s if they will earn over $600 annually from a company. However, corporations are generally exempt.
The W-9 is not sent to the IRS. It is kept by the requesting company for tax purposes. By gathering W-9s, companies obtain the information needed to file 1099 forms for non-employee compensation payments.
Do I Legally Have to Fill out a W9?
An S-Corp must fill out a W-9 form if requested by another company to make a payment. The W-9 provides the S-Corp’s name, address, and tax ID number. Companies request a W-9 to report payments to the S-Corp on a 1099 form.
To complete the W-9, the S-Corp must:
- Enter its name
- Provide its address and tax ID number
- Indicate its status
Independent contractors working as sole proprietors must also submit W-9s if earning over $600 annually from a company. However, corporations are generally exempt.
The W-9 is kept by the requesting company for tax purposes, to file 1099 forms for non-employee payments. By gathering W-9s, companies obtain the information needed to file 1099 forms.
When to Request a Form W-9
As a small business owner, it is important to collect a W-9 for any person or entity you expect to pay more than $600 in a tax year. You will use the information provided to you on the W-9 to complete Form 1099-NEC, Nonemployee Compensation, or Form 1099-MISC, Miscellaneous Income.
Do Businesses Need to Get a W9 From All Vendors?
Businesses should request a W9 from all vendors. Certain vendors will be exempt from backup withholding and still need to fill out Form W-9 to enter an exempt payee code and make certain certifications.
Why Request a W-9 Form?
IRS Form W-9, Request for Taxpayer Identification Number and Certification, is a one-page IRS tax document that individuals and businesses use to send the correct taxpayer identification number to other individuals, clients, banks, and financial institutions. Most often, when you’re a self-employed contractor, you send it to someone so that they can then send you back Form 1099, which you need to submit to the IRS if someone paid you more than $600 this year.
How Does Form W-9 Help Businesses?
Form W-9 not only helps businesses process vendor payments but also enables various compliance protocols and helps streamline reporting and regulatory operations.