Form W-9 is use to confirm an individual's Taxpayer Identification number (TIN), address, and name. It is one of the most commonly used IRS Forms. If you are a self-employed individual engaged with a company or business, and are expecting an income in return. Then, in such a case, the company/business will ask you to fill out Form W-9.
You will complete the Form W-9 and send it back to the company. With the information provided in the form, the company will prepare a 1099 form. Form 1099 will report the payment the company made to you by the end of the year.
Additionally, the W-9 forms is also known as the Request for Taxpayer Identification Number and Certificate Form. In this blog, we will understand everything around the W-9, including its benefits, who can use it, how to file it, and a lot more.
Key Takeaways
- The W-9 form is a commonly used IRS form for employers and other business entities. They use it to verify the TIN, name, and address of an individual who is receiving the income.
- Independent contractors, freelancers, basically any self-employed individual who is working with a company where they are not employees, are required to provide the company with a W-9 form.
- The information taken on this form is further used to generate Form 1099. Form 1099 is required for tax filing purposes.
- If you fail to provide the W-9 form, then your client has the right to withhold taxes from your earnings. The taxes withheld are at the rate of 24%.
Here is a simple and example-backed explanation to form a W-9. This form is one of the most commonly used Internal Revenue Service forms. As a self-employed individual, if you have any business with a company where you will be paid wages/salary or income, such as interest or dividends, then in this case, the company will ask you to fill out Form W-9 and send it to them.
The information you provide from the W-9 helps the company prepare Form 1099. In this form, the company reports the payment they made to you in the entire tax year and determines whether you are subject to a backup withholding or not.
Here is a tip for the business entities: if you hire any independent contractor for your business, please ask them to provide you with a completed and accurate W-9 forms.
What Is Backup Withholding?
As an individual, if you are receiving any payment from a payer, then the IRS requires the payer to report such payments on an information return.
Any business entity or the person paying you does not withhold any taxes from these types of payments since it is assumed that you, as the recipient of the payment, will report the payment as taxable income while filing your federal income tax return.
Now, there are situations where the payer is required to pay the taxes on the income at the rate of 24%. This 24% tax is taken from any of the future payments to ensure that the Internal Revenue Service receives the tax that is due on this income.
This is backup withholding.
You will be subjected to a backup withholding, and the party paying you will withhold a flat 24% if:
If you failed to provide the accurate taxpayer identification number (TIN) to the payer party for reporting to the IRS on the required information return. The taxpayer identification number can be either your Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN).
Backup withholding also happens when the income from interest and dividends you received is either not reported or misreported.
You fail to certify that there is no backup withholding against you.
How To Prevent Backup Withholding
To stop or prevent backup withholding of the taxes, you need to correct the root cause of it. This might include you providing the correct taxpayer identification number (TIN) to the person paying you. Along with this, you must also resolve the underreported income, file the missing returns, or pay the amount owed appropriately.
If you received a Form 1099 outlining that there has been backup withholding against you, in such a case, please ensure to report these as federal income tax withheld while filing your income tax return.
Who Asks for a Completed W-9?
Form W-9 is completed by a self-employed individual and sent to the business they are working with, where they are not employed. Such as independent contractors, freelancers, or gig employees under a non-employment structure.
The self-employed individual will send the form if the business they are working for is going to make any payment to them in the future.
Apart from this, there are certain other considerations under which Form W-9 is required. Such as:
A financial institution or a bank can ask for Form W-9. They generally do this as a part of setting up a new bank account, as dividends or interest are furnished through Form 1099-NT.
Another scenario is when a participant wins prize money in a contest. Since the prize money may be taxable income, it is required to report to the IRS; hence, filing out Form W-9 is important.
Additionally, Forms 1099 and 1098 Form are used to report the mortgage interest payment, real estate transactions, cancellation of debt, and student loan payments. For such forms, the opposing party can request Form W-9. They do this to ensure that all the information on file they have is accurate.
The right time to ask for Form W-9 is when you start working with the freelancer ot contractor. As a business, you must ask them to fill out the form before beginning any engagement. Failing to do so can be financially troublesome for both companies and self-employed individuals.
When you work as an employee or a self-employed individual somewhere, you are expected to fill out some paperwork. Such paoepwpek is done to gain your personal identifiable information.
As a self-employed individual who is receiving non-employee compensation, you generally do not work for a business or a person as their on-board employee. Now, if you do not work for such a business as an employee, then your earnings are reported on a Form 1099-NEC; therefore, you would need to provide a Form W-9.
Form W-9 will hold all your personal identifiable information. It will further state whether or not you will be subjected to backup thinking.
Whereas if you are an employee, you will have to complete the W-4 Form. This form lets your employer know how much money you wish to withhold for federal income taxes.
Form W-9 is available on the IRS official website; you can download it from there. Now, to complete the form, you are required to provide the following information in the following lines.
Line 1: Your Name
If you are filing the form as an individual, enter the name mentioned on your tax return.
In a case where you have changed your name without informing the Social Security Administration, then enter your first name. Now enter the last name as shown on your Social Security card, and your new last name.
As a taxpayer, if you have applied for an ITIN, enter your name as you entered on Form W-7 application line 1a. Ensure that this name also matches the one you entered on Form 1040.
Filing the form as a single proprietor or a single-member LLC. Then you have to enter your individual name, similar to the one on 1040/1040A/1040EZ. Additionally, on line 2, you can enter your business, trade, or DBA ("doing business as").
Line 2: Business Name
If you are filing Form W-9 as a business, then use this line to provide the information.
Line 3: Federal Tax Classification
As per your scenario, in line 3, choose the appropriate federal tax classification with respect to the name on Line 1. You are required to check only one box on line 3 of the W-9 Form.
Below are the options for which box you should check on Line 3.
| Individual or business type |
- |
| If the business or person listed on Line one of the W-9 form is a corporation. |
Corporation |
| If the sole proprietorship, individual, or the single-member LLC that is owned by individuals or disregarded for the purpose of federal tax. |
Individual/Single-member LLC or the sole proprietor. |
| Now, in a case where the LLC is treated as a partnership, disregarded entity separated from its owner and owned by any other LLC not disregarded for federal tax. |
The limited liability company must enter the appropriate tax classification. Which is P for partnership, C for Corporation, and S or S corporation.
|
| A Partnership |
Partenrhsip |
| Trust/estate |
Trust/estate |
Line 4: The Exemptions
If you are filing out this form as an individual, please do not worry bout this section.
Certain organizations and businesses are exempt from backup within, and those will need to fill this line. You might need to enter a code in the box named "Exempt Payee Code"
The W-9 Form instructions state the employer's payee and their codes. Along with this, there are the types of agreement for which each code should be used. For example, if any corporation is filing out Form W-9 for interest or dividends, then it will have to enter code 5.
Such payees that are exempted from reporting under the Foreign Account Tax Compliance Act (FACTA) are also required to enter the code. The box where they will enter the code will be under the name "Exemption from FATCA reporting code" box.
Please ensure that none of the boxes mentioned above are for freelancers and independent contractors.
Line 5 and Line 6: Address, city, and the ZIP Code.
In these lines, you have to provide the address where the person or business will mail your Form 1099. Enter the correct address, city, state, and ZIP codes in Lines 5 and 6.
Line 7: Account Number(s)
This line is used when you need to supply the business or the person paying you with account information. Such information includes brokerage or bank accounts.
Part I: TIN
This is the section where you will enter your taxpayer identification number (TIN). As a single-member LLC or an individual, you can enter your SSN.
Whereas if you are a multi-member LLC that is classified as a partnership, C corporation, or S corporation, you can enter your Employer Identification Number (EIN).
If you are filing the form as a sole proprietor, you can enter any of the numbers.
Lastly, in the case where you are a resident alien in the US, you can use the IRS ITIN.
Part II: Certification
Lastly, you sign the form acknowledging that the information you have provided is accurate to the best of your knowledge. Intentionally lying or providing wrong or stale information means either you are out for a hefty bounty or going straight to jail.
If you are subject to backup withholding for not reporting income through dividing interests on your tax form. In this case, you will see Item 2.
If you are completing Form W-9 as a joint account, then whose TIN is mentioned in Part 1, only that person will sign.
Once the Form W-9 is accurately completed, it is used to prepare 1099 Forms. Ensuring that the information provided in the Form W-9 is updated and accurate will save a lot of time and financial trouble.
Filing of Form W-9 has to be done very carefully. Hence, here are a few things to consider.
Signing Form W-9
The form tells you to cross out item 2 under the circumstances if the IRS has notified you that you are currently subject to withholding.
You are also required to cross out Item 2 if you are filling out Form W-9 with respect to a real estate transaction.
In the fine print instructions of Form W-9, it is mentioned rightfully that most people do not need to fill out this form. Such individuals are only required to sign it they they have been notified by the IRS that their previously provided TIN was incorrect.
But if we keep these technicalities aside, the entity that has asked you to fill out the form might consider it incomplete if you do not sign it.
Returning Form W-9
You are required to return the completed W-9 form to the person who asked you to file it. Now, how are you going to deliver Form matters? Delivering it in person is usually not considered a much more convenient method. Sedning y mail si oftern secure,
If you email it, ensure that the document and your message are encrypted. Check twice that you have added the right received mail addresses.
Lastly, before trusting anyone with your confidential government documents, check their reputation.
Failure to Remit Form W-9
Completing the Form W-9 is done for your own good. However, if you are skeptical about who is asking for your identifiable information and why, then those requests must be avoided.
Now, if you fail to provide the Form W-9, there are some consequences that you have to face. The first and most obvious result is the party owing you, beginning to withhold taxes from your upcoming payments. And the tax rate of backup withholding tax is 24%.
Additionally, the following penalties will be applicable for non-compliance:
- If you fail to provide the correct TIN to the requestor, a penalty of $50 will be imposed.
- If you made an unreasonable statement without any credible basis that results in a no backup violation, then $500 penalty is coming your way.
- For falsifying the certification or affirmation, other fines or imprisonment are imposed.
- If any party has disclosed or misused someone's information provided on Form W-9, then civil or criminal penalties will be imposed upon them.
One of the most common IRS tax forms, the W-9, requires self-employed individuals to provide their TIN and other relevant information. The information gained from the W-9 is then further used to fill out our Form 1099.
However, filling out Form W-9 accurately is highly important because of small errors, and you are subject to penalties. Providing false or misleading information can even lead to imprisonment.
Taking the help of a US-based tax professional can help you in understanding and completing the details of this Form fairly. Savetaxs is one such professional helping thousands of U.S. citizens and resident aliens complete their tax forms accurately.
Understanding IRS tax forms for 2025-2026 can be complicated, and we are here to make each one easy for you. We have, by now, helped thousands of individuals and businesses with US tax services and consultancy.
Our experts ensure that the entire Form W-9 process remains transparent, and you get all the possible benefits available to you.
Savetaxs is serving its clients 24/7, so now is the right time to connect with us! Let us handle your taxation stress the right way.
Note: This guide is for information purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult either a CA, CS, CPA or a professional tax expert from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.
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