Form W-9 (formally, "Taxpayer Identification Number and Certification Requirement") is used in the United States income tax system by a third party who must file a return information with the Internal Revenue Service (IRS). It requests the identification of the name, address, and taxpayer of a taxpayer (in the form of a Social Security Number or Employer Identification Number).
This form was never actually sent to the IRS, but was managed by individuals who requested return information for verification purposes. Information on Form W-9 and payments made are reported on Form 1099.
Video Form W-9
Use the letters
Contractor-business arrangement
Form W-9 is most commonly used in contractor-business settings. Businesses may use Form W-9 to request information from contractors they lease. When a business pays a contractor more than $ 600 during the tax year, the business is required to file a Form 1099-MISC, a variant of Form 1099. To fill out a Form 1099-MISC, a business may need to request information (such as an address and Tax Identification Number) from the contractor, the Form W-9 is used. Business does not send Form W-9 to IRS.
Avoiding backup deductions
Another purpose of Form W-9 is to help payees avoid back-ups. The payer must collect withholding tax on certain payments that can be reported to the IRS. However, if the payee declares on W-9 they are not subject to withholding deductions, they generally receive full payment because they are from the payer. This is similar to the tax exemption certification found on Form W-4 for employees.
Financial institution-customer settings
Financial institutions sometimes send Form W-9 to customers for information. However, it is not necessary for the customer to fill out a form if the agency already has the requested information from when the customer opens the account.
Employee-employee settings
In employer-employee settings, Form W-9 and Form 1099 should not be used. Conversely, the appropriate Form W-4 (to provide information) and Form W-2 (to report the amount paid) must be submitted instead.
However the company may still send Form W-9 to have information on the record that the recipient does not need to be sent Form 1099.
Maps Form W-9
Archiving method
Form W-9 can be completed on paper or electronically. For electronic archiving, there are some requirements. That is, the applicant who establishes the electronic filing system shall ensure that the electronic system provides the same information as on Form W-9 paper, that a printed copy may be provided to the IRS upon request, that "information received is information transmitted and [...] all user access opportunity resulting in submission [documented] ", that the person accessing the system and providing information is the individual identified on the form, and that the electronic signature is used.
Deadline
Some certified public accountants consider it best practice to ensure the completion of Form W-9 by the payee before issuing any payments.
There may also be a $ 50 penalty for each instance where Form W-9 is not filled.
External links
- A PDF version of the IRS Form W-9
References
Source of the article : Wikipedia
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