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What Is a W-9 Form Used For?
The IRS has many different forms, and the W-9 is one of the most straightforward.
The form is used to send information to another bank, person, or financial institution, and provides information about someone’s returns.
However, since you do not send it to IRS, it is important to return it to the correct recipient because it contains your personal details.
The sections below cover everything you need to know about your W-9 form.
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What Is A W-9 Form?
The W-9 form is an IRS information page that businesses and individuals complete in order to send their taxpayer number to clients, individuals, financial institutions, and others.
In most cases, you send the form with the purpose of receiving the Form 1099, which needs to be sent back to the IRS for tax purposes if you received more than $600 revenues from someone during the tax year. As a result, the form W-9 is not sent to the IRS, but it contains required personal information, such as Taxpayer Identification Number (TIN), address, and name.
What Is W 9 Form in Medical Billing?
Medical practices are required to submit these forms to insurance companies and their other payers. This is used to guarantee that the TINs are accurate, which is mandatory for reporting the medical practice’s income stream to IRS for tax filing purposes.
What Is a W9 Form Used for In Canada?
Canada does not require W-9 forms because they are only to be used by US citizens. If a non-US citizen receives the W-9 form, they must inform the business or the individual that they are not required to fill in this form. Instead, they must complete one of the W-8 versions, such as the W-8BEN form.
What Is A W9-S Form?
The W-9S form is used by universities and other eligible educational institutions. This is sent to students because the institution must report the 1098-T Tuition Statement Information to the IRS.
Who Completes A W-9 Form?
Usually, there are four main situations when you need to complete a W-9 form. Firstly, as briefly mentioned above, you need this form if you are a freelancer, contractor, or consultant who received more than $600 revenues from one single client during the tax year. You need to send this form to them, so they can send you back Form 1099-MISC which needs to be filed with IRS for tax purposes.
A second situation is when you need to open a new bank account. In this case, the bank might require you to send them a W-9 Form.
In the case of investments, the financial institution requires a completed W-9 form. This is so you can receive from them a type of the 1099 forms, which will then be used to report your interest income, proceeds, or distributions. For instance, if you plan to sell your house, you will need to complete the W-9 form.
Finally, the last situation when you might need this form is if someone cancels a debt you owe them. This is because they need to file Form 1099-C and send it to the IRS. As a result, you need to send them your completed W-9.
What Is A W-9 Form Needed For?
The W-9 form is required by firms or individuals to verify your tax identification number, name, and address. This is needed so that they can generate the 1099 tax form which is compulsory for tax filling.
In other situations when someone else requires a W-9 form, you might want to think carefully about whether you should send it to them or not. It contains your valuable information, so not everyone should have access to it.
If you are a freelancer, contractor, or consultant and you receive a Form W-9 from someone or a business that is not your client, do not send it back. This is because the form shows your Social Security Number (SSN) and other personal information that can be received by scammers for fraud or crime purposes.
Keep in mind that your employer should never ask you for a W-9 form. If you were employed, they should send you a W-4 form. In case you receive a W-9, it means that you are hired as an independent contractor, not as an employee. This means that you will have to make your tax payments to the IRS.
It is a general rule that someone will only ask you for a W-9 form because they need to report back to the IRS. In this case, asking the individual directly what it is used for might help you decide if they are a scammer or not. If they cannot give you a clear answer, it’s always a good idea to contact a tax professional to help you determine what must be done.
What Is a W9 Form for Landlord?
Your landlord requires you to complete the standard W-9 form. This is because they need your TIN so they can fill in their Form 1099 which is required for tax purposes related to the interest earned on your deposit. Similarly, if you are a landlord, you need to issue this form to your tenants.
How to Issue a W9 Form?
Generally speaking, if you are required to complete one, the individual or the business will send you a W-9 form. However, if you need to issue a W-9 form, you can easily find it online on the IRS website.
How to Do a W9 Form?
The one-page form is straightforward to complete. Fill in your full name and your business name, if it is the case. Then, choose the type of business entity you have: sole proprietor, C corporation, S corporation, partnership, trust/estate, LLC, and other. The “other” section is only for people who file outside the United States. Then, add your contact information.
The next part requires you to add your SSN or EIN (employer identification number). This is mainly why the person sends you the W-9 form. If your business is a partnership, corporation, or it has any employees, you need to add the EIN. There is an IRS online application form to request the EIN if you do not have it. The last part requires you to date and sign the document, certifying that all information is correct.
How Long Is A W-9 Form Valid
W-9 forms do not have an expiration date. The IRS requires you to keep the forms in your records for at least three years after the corresponding Form 1099 was filed.
What Is A Substitute IRS Form W-9?
You can create and use your own substitute W-9 form if it is similar to the one provided by IRS. You can use it with other business forms you use, including account signature cards. The substitute form must comply with a few requirements to be valid: to state that under penalties of perjury the TIN is correct, the payee is not subject to backup withholding because of failing to report the interest and dividend income, the payee is a US person, and the FATCA code (if the case) indicates that the payee is exempt from FATCA reporting is valid.
All in all, the W-9 form is sent and received by individuals, businesses, and other entities for tax filing purposes. In each case, the recipient must be careful to whom they send their personal information. If you run a business, or you are a freelancer, you must send this W-9 form to the eligible clients in order to file your taxes for the year.
Fortunately, the document does not have an expiration date, but you must ensure that you always have the correct and updated information when reporting to the IRS.
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