As a small-business owner or a private contractor, it is crucial to understand how to properly fill out a Form W-9. This form is necessary for each person or entity you contract with, as it helps your clients account for payments made to you. In this article, we will provide a step-by-step guide on how to fill out a W-9 form, ensuring that you comply with the necessary requirements and provide accurate information.
Your Name and Your Company Name
When filling out a W-9 form, it is essential to provide your name exactly as it appears on your tax return. If you use a middle initial on your tax return, include it on the form as well. The next section asks for your business name. If you do not have a business name, you can leave this box blank. However, if you own a limited liability company, it is important to note that the IRS considers your company a disregarded entity for tax purposes. In this case, you must write the company name in the designated box. If you own a corporation or are part of a partnership, make sure to include the name of that entity in the appropriate box.
Type of Entity
The next step is to indicate the type of business entity you own. If you have not formally established a business, you are considered a sole proprietor. However, if you have formed a business, you need to specify whether it is a C corporation, S corporation, partnership, or limited liability company. Additionally, provide the address of your company. If you are a sole proprietor, use your home address and include the zip code.
Taxpayer Identification Number
In this section, you must provide either your Social Security number or your employer identification number. If you are a sole proprietor or own a limited liability company, use your Social Security number. For other business entities, use your employer identification number. It is crucial to ensure that the number you provide matches the name you provided at the top of the form. The employer identification number should correspond to your business-entity name, while the Social Security number should match your personal name.
Certification as to Taxes and Citizenship
By signing this section, you certify that you are not subject to backup withholding for unpaid taxes. It also serves as confirmation of your United States citizenship and affirms the accuracy of your name and taxpayer identification number. Remember to include the date you signed the form.
Copies for Your Files
It is important to keep copies of all your W-9 forms for your records. Since you will need to fill out one form for each client, you may have multiple forms for the year depending on the number of clients you have. By maintaining these copies, you can provide documentation if the IRS ever asks whether you provided clients with your taxpayer information.
In conclusion, filling out a W-9 form correctly is crucial for small-business owners and private contractors. By following the step-by-step guide provided in this article, you can ensure that you comply with the necessary requirements and provide accurate information to your clients. Remember to keep copies of all your W-9 forms for your records, as they may be required for documentation purposes.
