Why complete a w 9

Employers do not make that withholding for contractors. At the end of the tax year, the business you did work for will use the information on your W-9 to complete a MISC. This form outlines all the payments made to you.

A financial institution may also require you to report interest, dividends and capital gains earned by their customers. Most of the time, a company or financial institution will send you a blank W-9 form to complete before you begin business with them. If you need to issue the form, you can download a W-9 from the IRS website. W-9 forms are for self-employed workers like freelancers, independent contractors and consultants.

If your employer sends you a W-9 instead of a W-4, the company has likely classified you as an independent contractor. You should confirm with the company that this is the case. Knowing your status can help you plan your tax return. The W-9 form allows businesses to keep track of their external workforce. If you did multiple jobs for multiple companies, you could fill out a number of W-9 forms in the same year. You will also have to submit new W-9 forms any time you change your name, business name, address or tax ID number.

Filling out a W-9 is pretty straightforward. Some businesses have multiple accounts with a vendor and this line is available to specify which account this W-9 pertains to. Requestors of Form W-9 will have to deduct backup withholding from any payments that are subject to it until you provide your TIN. This is where you sign when required. By signing it you attest that: The TIN you gave is correct.

You're a U. The rest of Form W-9 is dedicated to instructions that help you navigate the different responses throughout the form. Although Form W-9 is a standard tax document and by itself, it doesn't pose many problems, there are a few situations worth watching for. Make sure a person knowledgeable about your business is filling out the form. Employees complete Forms W-4, not Forms W-9, to set their tax withholdings. Make sure you understand and agree with the worker classification the requestor has in mind.

If you're unsure why you're being asked to complete the form, ask what types of tax documents you can expect to receive when the information is used. Make sure the person taking your information is authorized to do so. You should always exercise caution when giving out sensitive information like your name, address, SSN or EIN so take steps to transmit W-9 information securely. Protect the confidential information by sending it via an encrypted email, by hand delivery, or by mail. To change or withdraw your consent choices for Investopedia.

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W-2 Form: Wage and Tax Statement Form W-2 reports an employee's annual wages and the amount of taxes withheld from their paycheck. Here's why you need a W-2 and how it is used. If so, you need to inform the company that you are providing the W-9 to that they need to withhold taxes from the money that they pay you. Submitting Form W-9 Simply return the completed W-9 form to the person or company requesting it. Perfect for independent contractors and small businesses Find more tax deductions so you can keep more of the money you earn with TurboTax Self-Employed.

State additional. Looking for more information? Get more with these free tax calculators and money-finding tools. Stimulus Check Calculator See if you qualify for a third stimulus check and how much you can expect Get started. Tax Bracket Calculator Easily calculate your tax rate to make smart financial decisions Get started. Self-Employed Expense Estimator Estimate your self-employment tax and eliminate any surprises Get started.

Documents Checklist Know what tax documents you'll need upfront Get started.