Disclaimer: Bonsai is not a law firm, does not provide legal services or advice, and does not provide or participate in legal representation
Any government needs to run smoothly. For this to happen, they need to ensure that their citizens pay their taxes on time. For this reason the IRS has made things much easier for individuals or entities to be able to give all the information they need to companies. One such form is the W9 for individuals. This is one of the ways that the IRS ensures they are able to collect taxes from individuals, whether one is self-employed or is doing freelance work. The W9 for individuals is an easy to fill form and can take less than under five minutes to fill. The w9 form can easily be downloaded from the IRS website.
The w9 for individual is a Request for Taxpayer Identification Number and Certification. The form is what is used to get basic details about you and is used to fill the form 1099 that is then issued to the IRS. The taxpayer identification number is what is used by the IRS to identify you and have any tax remitted to the IRS from your details checked. Any consulting or contracting work that’s done by you for any business and pays more than $600 will require you to issue them with the w9 form. Once you have filled all the necessary details on the form, you will need to sign the form and certify that all information written is true. The w9 needs to be filled with all the correct information to prevent you from getting penalized by the IRS. The w9 for individual form isn’t what’s presented to the IRS. Once the requester gets the form, they file it in your file and can refer to it when they need to pay you.
On the w9 individual form, you will need to indicate whether you are exempted from the backup withholding tax or not. The backup withholding tax is 28% of the payment that’s to be made to you by any entity. Once you have been issued by the taxpayer identification number, the IRS will inform you on whether you have are exempted from the backup withholding tax or not. If you aren’t exempted, your employer will need to remit that from your payment and send it to the IRS. However, in case you have been exempted, then you will receive your pay in full and the company will be liable for that tax payment. Additionally, it’s important to ensure that you meet the deadlines, when you are required to file your taxes. Failure to do this will result in you being penalized by the IRS and as they say, ‘prevention is better than cure’.
As is lawfully required, the company that gives you the job will remit your taxes to the IRS to ensure that they don’t have a run in with the law. Additionally, it’s important to ensure that all the information given on your form w9 for individual is for genuine purposes. All information you fill on the w9 form is sensitive as it is your identity. In case someone comes across it, they can use it for identity theft. It’s important to ensure that the information given is kept safe and should be sent securely to the requester. In case you have any doubts about the entity asking you for your details, you can hold on sending it to them and finding out more about them. This way, you protect yourself from unscrupulous people. If you need to send out your w9 individual form, ensure you don’t fax it where it can be picked by just about anyone.