The contractor is responsible for reporting their income if they are not working with a business. According to the IRS, there are 13 different exemptions from backup withholding on a W-9. Those exempt must still fill out the entire form, but on line 4 will enter the payee code that refers to their exemption. Creditors canceling a debt may send the ex-debtor a Form 1099-C to officialize the amount that the ex-debtor no longer owes, provided the total debt amount is $600 or more.
The form requires an individual to provide their name, address, tax qualification, and withholding requirements. This form serves as a guideline and gives the employer the information needed to fill out a Form 1099 at the end of the year. If you receive an email request for a Form W-9 and you’re not sure it’s legitimate, contact the supposed sender by phone (and don’t use any phone number in the suspicious email) to ask if the request is valid.
Making sure that Form W-9 is completed accurately can save a lot of trouble come tax time. When beginning to work as either an independent contractor or an employee, you should expect to fill out some paperwork providing your personal identifiable information. Check the appropriate box if your business is registered with the state and is taxed as a C corporation, S corporation, or partnership. The IRS considers a sole proprietor an individual who owns an unincorporated business without help, as long as the business isn’t an LLC run as a C-corporation.
If you are exempt, this form is your means of communicating that exception to the paying party. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. In addition, the W-9 may be a company’s primary means fedex w9 of obtaining your personal information.
Then email the encrypted file and send the decrypting password in a separate email. https://www.facebook.com/BooksTimeInc/ Alternatively, you and the requesting entity may use a secure file-sharing platform to send and receive the electronic form. But an Employer Identification Number (EIN) may be needed instead of their Social Security Number in two instances.
Several types of individuals and businesses can fill out Form W-9. Depending on your circumstance, select the most appropriate federal tax classification on line 3 for the name entered on line 1. The IRS says, “These codes apply to persons submitting this form for accounts maintained outside the U.S…If you are only submitting this form for an account you hold in the U.S., you may leave this field blank.”
Form W-9 is only used if the taxpayer is a U.S. person (including a resident alien). A U.S. person is defined as an individual, partnership, corporation, estate, or domestic trust. Now, some sole proprietorships also have EINs, but the IRS prefers that sole proprietors use their SSNs on Form W-9. Again, doing so will make it easier to match any 1099s you https://www.bookstime.com/tax-rates/massachusetts receive with your tax return, which you will file under your SSN. In this section, you will provide your taxpayer identification number (TIN). As an individual or single-member LLC, this will usually be your Social Security Number.