If you’re just starting to work as a freelancer or independent contractor, you must complete a W-9 form when the payor requests it from it. Form W-9 is very crucial since individuals and companies who hire freelancers to do a job for them are required to show it on Form 1099 and to do so, they need the information on Form W-9.
Where can I get the W-9 Form?
Form W-9 is provided by the Internal Revenue Service website but finding it can be challenging as there are so many guidelines, articles, documents.
Luckily, you can visit here to be redirected to the Form W-9 directly to view, download, or print it for free. You can print the complete 6-page form directly from your browser by clicking the print button at top right or download and print it later whenever you need it.
Employees and vs. Freelancers
Freelancers are not counted as employees so under the law, any payment done to freelancers are done to nonemployees which must be stated on Form 1099. If the payor hires a freelancer regardless of the job title and pays more than $600 for that tax year, they must submit their 1099 to the IRS.
This also ensures that the freelancer has received payments and therefore the income is taxable. Not complying with the payor’s request for W-9, Request for Taxpayer Identification Number and Certification will result in $50 fine for each incidence freelancer did not provide.
Also, the freelancers will be subjected to backup withholding which means the payor can withhold 28% of your income from the job and forward it to the IRS. So not completing a W-9 can bring more problems that just $50.
If your income from the job doesn’t exceed $600, the individual or the company hired you doesn’t necessarily need to request it but even if so, they don’t have to forward it to the IRS.