Because the W-9 also requires a Social Security number or tax ID, it should be guarded carefully to protect from identity theft. They should also have concerns if they receive a W-9 form from a company for whom they are supposed to be working as a regular employee; the company may be trying to defraud them of benefits they are entitled to by counting them as an independent contractor. If an LLC operates as an independent contractor for other companies, then it too must complete a W-9 form.
To do so, the following special considerations should be taken for the form:. UpCounsel accepts only the top 5 percent of lawyers. The form will also typically show the taxable amount on the form itself. The K form is typically used when you receive payments via debit, credit or store-valued cards. This is common for online retailers who accept card payments online. A S form is used to report income gained from real estate transactions.
This could include the selling of property or rental income. It is the seller's responsibility to track and submit all relevant information regarding the sale to the IRS. Related: Guide to Unemployment Benefits. Both companies and individuals may need to fill out a For example, employers will send out W-9 forms when they first begin working with an independent contractor to collect their tax information, but they will also complete a at the end of the year to record the total payments they made to that contractor.
Individuals need to fill out the W-9 if they work as a freelancer or independent contractor. They will also need to file a to the IRS at the end of the year for each business they provided products or services to. Individuals may also receive a for other income, such as interest on investments or if you accept online payments via credit or debit cards. The form must be completed and filed with the IRS by January 31st whether you file by electronic or paper mail.
The form you need to use will largely depend on who is requesting the information. If you are an independent contractor and the company you are working with needs information about you, then you need to submit a W If it is the federal government requesting the information, then you'll need one of the forms to report on your various income sources. For employers, it is both the contractors and the federal government requesting information, in which case you'll need to submit two copies of a form.
Find jobs. Company reviews. Find salaries. Upload your resume. Sign in. Career Development. It can be a little confusing to differentiate whether you should fill out Form W-9 or Form W-4 based on the actual work performed. A better gauge is the circumstances around the working relationship.
Generally, the more control an employer exerts over what a worker does and how they do it, the more likely that person is an employee and not an independent contractor. Another quick way to tell is to determine whether the business aspects of the relationship are controlled by the payer. That includes how the worker is paid, whether expenses are reimbursed, which party provides tools, supplies, etc. If the employer controls those details, the worker is more likely an employee.
If employee benefits are offered, like pension plans, paid vacation, and matching k contributions, the worker is probably an employee. Sometimes an employer might try to save money by classifying an employee as an independent contractor. Here are a few things to look out for:. Take Control of Your Finances Sign up to get the latest tax tips, information on personal finance and other key resources sent straight to your email.
What is a W- 9 tax form? What is the purpose and use of the W-9 Form? Form W-9 vs Form W-4 The business you work for must classify you as an independent contractor or an employee. Common questions about Form W-9 When should you update or send out a new W-9? You must send a new W-9 to active customers or clients whenever your information name, business name, address, or Social Security number changes.
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