The title of Form W-9 is formally Request for Taxpayer Identification Number and Certification. Companies utilize this form to acquire the Taxpayer Identification Number (TIN) from licensed contractors, suppliers, and freelancers. The form similarly provides other personally recognizing details like your name and address.
The form serves as an arrangement through which you, as a licensed contractor or freelancer, are accountable for keeping taxes from your earnings. Your company keeps some of your earnings to cover federal earnings taxes and FICA taxes (which consist of Medicare and Social Security taxes) when you’re a full-time worker. Companies do not make through which withholding for licensed contractors.
Free W9 Form For 2020
As opposed to what they do for their employees, businesses take care of independent contractors differently. Their income taxes are not withheld, and contractors are entitled to pay for their Social Security taxes or Medicare. These responsibilities aren’t the employer’s responsibility. Whatever the case, the IRS needs to know the exact amount these contractors pocketed, to ensure they pay the taxes they deserve to. The 1099-MISC is a vital resource here. It’s used to gather this information. So businesses needn’t send anything to the IRS, not even the Form W-9
When is it Inappropriate to Fill Out Form W-9.
The sudden arrival of a Form W-9 form for filling should be dealt with greatly by an independent contractor. Form W-9 is sometimes also used by financial institutions in cases when they need to source information from a customer, to report dividends or interest.
Next, supposing that the company asking for your Form W-9 is your employer and classifies you as an employee rather than an independent contractor, then there’s a reason to worry. The difference is considerable.