One of the most common uses of Form W-9 is because of the 1099-MISC if not the most. Companies are required to complete a Form 1099-MISC for each instance they make over $600 in payments to a freelancer or a private contractor.
The Form 1099-MISC reports the miscellaneous income to the IRS. The private contractors and the freelancers then can use Form 1099-MISC upon receiving it to file their taxes. In these cases, 1099-MISC has the same purpose as Form W-2.
Since the recipient’s Taxpayer Identification Number must be on Form 1099-MISC, you can make a request for Taxpayer Identification Number to a freelancer or a contractor that worked for you. Not filing a W-9 on their end will result in a $50 penalty for each W-9 remains unfiled.
This will give you the right to forward a portion of the payment made to the freelancer to the IRS.
Where to get Form 1099-MISC?
Form 1099-MISC along with any other IRS tax document can be found on the agency’s website. The only downside to it is that unlike Form W-9, the IRS website doesn’t allow you to complete it online. To fill out a 1099-MISC online, you can visit the site included in this article.
One thing you should always keep in mind when filling out a Form 1099-MISC is that you never cut the form. Keep it as it is even though more than half of it empty.