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 furthermore offers other personally recognizing details like your name and address.
The form works 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. Firms do not make wherein withholding for licensed contractors.
W9 2020 Form Free Download
Their income taxes are not withheld, and contractors are entitled to pay for their Social Security taxes or Medicare. Whatever the case, the IRS needs to know the exact amount these contractors pocketed, to ensure they pay the taxes they deserve to. Businesses needn’t send anything to the IRS, not even the Form W-9
When is it best to Fill Out Form W-9.
The unexpected arrival of a Form W-9 form for filling should be taken on very seriously 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 business requesting for your Form W-9 is your employer and classifies you as an employee as opposed to an independent contractor, then there’s a reason to worry. The difference is considerable.
