Have You Been Familiar Yet With Filling And Submitting W9 Form 2021 Printable? You May Learn Further About The Definition, Required Person To Fill, And The Steps To Complete This Tax Document Below.
If you are a self-employed person, freelancer, or have hired service from these professions, then you may have heard about W9 Form. This is considered as one of the easiest IRS-issued documents to fill out, but for those who are new to it, the form still has some challenges to complete correctly. Read further about the W9 Form 2021 Printable document below in this article in detailed explanation.
What Is W9 Form?
W9 Form is an Internal Revenue Service (IRS)-an issued document that’s formally referred to as Taxpayer Identification Number and Certification. It’s mainly used to provide the information required to report taxes on Form 1099, which contains records of compensation and income of non-employees. It comprised of information that’s similar to the W2 Form or also known as the Wage and Tax Statement.
You may be required to fill in and submit a W9 Form by company or entity for different reasons, even though it is less common, such as transactions of real estate, payments of mortgage interests, contributions for IRA property abandonment or acquisition, or debt cancellation.
Who Has to Fill It Out?
W9 Form is filled by self-employed persons, such as independent contractors, consultants, and freelancers. They have to submit the document if they earned more than $600 annually without being hired as permanent employees in a company.
If you are asked to fill W9 Form instead W4 Form by your employer, then the chance is, you are considered an independent contractor by the company. You need to confirm with your employer regarding your employment status to avoid future problems related to your tax return.
Where Can I Get the W9 Form?
The party that requests individuals to submit the W9 Form usually provides a blank document of it. Otherwise, the W9 Form 2021 Printable can be downloaded from the official website of IRS. Keep in mind, however, the filled-out form needs to be sent to the requesting party instead of IRS or You can download W9 Form 2021 Printable, Fillable below.
What Information Are Needed Inside W9 Form?
W9 Form asks you about personal and business information. The information is including your full name and/or your business name, your business classification (partnership, sole proprietorship, S corporation, C corporation, limited liability company, trust/estate, or others), and the tax identification number (Employer Identification Number or Social Security Number).
The form also asks you to verify that you aren’t subjected to backup withholding even though you’re more likely not. However, if you indeed are, then the company that hires you will have to withhold income tax at the 24% flat rate to be forwarded to the IRS.
As this specific tax form requires you to input your tax identification number (TIN) such as your SSN, the document needs to be protected carefully in order to prevent identity theft crime.
How to Fill W9 Form in Step-by-Step Manner?
As has been mentioned above, W9 Form is really easy to complete. However, if this is the first time you’re filling out the document, you may find a step-by-step instruction guide to be useful.
Here are the steps you can follow to complete the form:
- Input your name with the identical spelling to the name on your tax return.
- Input your business or entity name – if it is different from your own name in the first point.
For example, you submit the form as a sole proprietorship, but you use a business name instead of a personal name for the purpose of marketing, then you may input the business name in this line.
- Choose your business entity type according to the federal tax classification.
Put a checkmark next to the box that contains options of business classification of partnership, sole proprietorship, S corporation, C corporation, limited liability company, trust/estate, or others.
- Inform about your exemptions. Most of the times, the exemptions boxes are left blank by the taxpayers, because they don’t apply to a common freelancer or independent contractor, except if they are:
• Being exempted from backup withholding (which is typically applied to the corporations). In this case, you have to input the code inside the box of ‘Exempt payee code’. You may choose the code that must be used from the list that’s provided within the W9 Form. For example, the code payment and receipt of interest and dividend of corporations are ‘5’.
• Being exempted due to perform Foreign Account Tax Compliance Act (FATCA) report. In this case, you have to input the code inside the box of ‘Exemption from FATCA reporting code’.
- Input your full address that’s comprised of street name, city, state, and postal code.
If your business address is different from your home address, then you must input the address that’s used on the tax return.
As for the instance, a sole proprietor may file their tax return by using their home address, but rent an office to run the business. In this case, they must file a W9 Form with their home address, so IRS does not have difficulty in matching the employer’s 1099 Form and 1040 Form.
- Input the full name and full address of the requester. However, this step is optional because it merely serves as a record of the business or entity that requests your tax identification number.
- The next section is called Part I. In this section, you have to input the tax identification number of your business. If you are classified as a sole proprietorship, you may put your Social Security Number (SSN), and if you are classified as other business types, you may put Employer Identification Number (EIN).
It is still possible that you put EIN as a sole proprietorship, but SSN is still preferred by IRS to be inputted on the W9 Form because it will be easier the 1099 Form that comes with a tax return document that uses and contains SSN.
If your business doesn’t have EIN yet due to being new, you are able to apply for the number on the official website of IRS at www.irs.gov.
- The next section is called Part II. In this section, you must confirm all the accuracy of your information before it is being signed.
Lying by intention on the tax-related form may result in jail time or fine payment. Before you sign the document, check if all the information you have input is accurate so you don’t accidentally commit a penalty of perjury.
What are the Differences between W9 Form 2020 vs. 2021?
The last adjustment of the W9 Form by IRS happened in 2018. During that time, the document draft was published to show the most recent update of the form. It was redesigned to be easier to understand, but still, the withholding agents must take steps to adjust to the changes and provide the newest version of the W9 Form.
In terms of function, the W9 Form 2021 Printable carries the same purpose, which is to record information about taxpayers that includes:
- Tax identification number,
- Information about exemption from other specific tax reporting requirements,
- Status of backup withholding
The document reformation of the W9 Form in 2018 involves the changes of backup withholding flat rate to become 24%, according to the 2017 Tax Reform Act document. The adjustment starts to be effective in October 2018 and still applies until now.
Frequently Asked Questions (FAQ) & Answers
Who Needs To Fill Out A W9?
W9 Form is most typically filled out by self-employed persons such as independent contractors or freelancers.
What Is The Purpose Of The W9 Form?
The primary purpose of using the W9 Form is to provide information about Taxpayer Identification Number (TIN) to the person or entity that’s going to file a tax-related report to IRS.
Do I Have To Pay Taxes If I Fill Out A W9?
W9 Form indicates that your tax won’t be withheld by the business or entity you work for. You are the one that’s responsible to pay the correct amount of taxes to the IRS. You also require to pay both your share and your employer’s share of your Medicare and Social Security taxes.
What Is The Difference Between A W2 And a W9 Form?
W2 is given by the employer to be filled by the fixed employee in their company. Meanwhile, W9 is given by a business client or temporary employer for hired independent contractor or freelancer.
Can You Refuse To Fill Out A W9?
Yes, you may refuse the request to submit the W9 Form if the person or business that makes the request seems suspicious. They must have a legitimate reason to ask for a W9 Form because it contains such important personal information as your SSN numbers.
Is A W9 The Same As 1099?
W9 Form is used to provide tax-related information by independent contractors or freelancers, while the 1099 Form is used by employers to report their temporal hiring to the IRS.
What Happens If I Don’t Fill Out A W9?
Failure in filling out the W9 Form may cause you to get penalized with a $50 fine. You’d also be subjected to 28% backup withholding from your paycheck which will be forwarded to IRS.
By providing information accurately on your W9 Form 2021 Printable form, it helps to make sure your payments and tax-related matters reported to IRS are executed properly. If you need assistance regarding the content of this document, you may reach a financial adviser, such as an accountant.