Disclaimer: Bonsai is not a law firm, does not provide legal services or advice, and does not provide or participate in legal representation
When running a business, you always strive to stay on the right side of the law. You don’t want to miss tax deadlines, and end up being penalized. In business, it’s all about the profits. Having your taxes filled and filed on time can save you thousands of dollars. No one wants to run a business and have all their profits go into tax penalties when they could have well prevented it. As they say, ‘prevention is better than cure’. Once you get the business deals, as a vendor, you will be required to issue a W9 vendor form.
A W9 vendor form contains your details i.e. name, address details, and tax identification number. In any business, you transact whether as an individual or company, you will be required to issue the company that will be paying you with the W9 vendor form. This makes your filing tax much easier. The W9 vendor form can easily be found and downloaded on the IRS website. Additionally, it’s important to have the correct taxpayer identification number. If you don’t already have a taxpayer identification number, you can immediately apply for one. Ensure that all information filled out on your W9 vendor form that has been requested is correct and that the name matches your Social Security Number that’s on record. In the event you provide a W9 form with false information to any requester, there will be penalties that can range from $50 to $500 dollars or even imprisonment.
The W9 vendor form allows the requester to record any payments that they make to you. As is in any business, the IRS requires any individual or entity paying you to withhold a certain percentage of your pay to cater for federal income taxes. Once you have the taxpayer identification number issued to you by the IRS, they will notify you if you are eligible for the backup withholding. In the case you transact your business, you will need to notify your clients that about the backup withholding. There are certain payments that will incur the backup withholding. However, all real estate transactions are do not incur backup withholding. In the event that you provide your clients with incorrect information on your W9 vendor form, you will be liable for backup withholding. So as not to incur more loses due to such charges, ensure the information on your W9 vendor form is correct.
Depending on your business type, your tax identification number could either be your Social Security Number or your Employer Identification Number. As such, you have to fill in the write details. Once you have filled all the sections required by your requester on the W9 vendor form, it’s important to keep it safe and deliver it to them securely. Your Social Security Number can be used to conduct fraudulent businesses and land you into problems if it happens to fall in the wrong hands. Making sure that your details are well secured is one step to you, avoiding problems with the law. Whenever you someone makes a request for your W9 vendor form, it’s very crucial to ensure that it’s for a genuine transaction lest you become a victim of identity theft. In the event you change your details or address or any other information pertaining and that identifies you on the IRS system, it’s important to fill in a new W9 form. This way, all your taxes will be filed rightfully and you will not become a suspect of tax evasion that will cost you millions of your hard earned money.