What is a W-9 tax form?

 

Editor’s Note: A W-9 is a common tax form many taxpayers—including independent contractors or gig workers—need to fill out each year. Learn more about the W-9 form meaning, examples of W-9 income, and other terms associated with this form here.

What is a W-9 form?

First, let’s define, “what is a W-9 form?” Here’s the W-9 form meaning, in a nutshell:

The form, officially called Form W-9, Request for Taxpayer Identification Number and Certification, is typically used when a person or entity is required to report certain types of income.

The form helps businesses obtain important information from payees to prepare information returns for the IRS. Taxpayers use the W-9 tax form to verify their correct taxpayer identification number (TIN) and to certify that they are not subject to backup withholding.

w-9 tax form

What are examples of W-9 income?

While tax form W-9 is used most commonly by independent contractors, gig workers, and freelancers who are paid $600 or more by a business, it can also be used to report other types of income to the IRS. Examples of the types of income include:

  • Acquisition or abandonment of secured property
  • Cancellation of debt
  • Contributions the taxpayer made to an IRA
  • Dividends
  • Miscellaneous income
  • Mortgage interest the taxpayer paid
  • Real estate transactions
  • Stock and mutual fund sales; and broker transactions

How to fill out a W-9

When you hear that you need to fill out a W-9, you might think it will be a complicated tax form. The good news here is that filling out a W-9 is a fairly short form. 

See how to fill out a W-9 in these steps.

On the top of W-9 tax form:

  1. Write the name as shown on your income tax return.
  2. Write the business name/disregarded entity name if different than above.
  3. Fill out the federal tax classification for the person whose name is entered on line 1. Only one box should be checked.
  4. Include any exemption codes, if applicable.
  5. Write the business’ address (number, street and apartment number or suite number).
  6. Write the business’ city, state, and zip code.
  7. List account numbers, if applicable.

Part I:

Enter the Social Security number or Employer Identification number.

Part II:

Sign and date the form.

IRS W-9 form terms

If you’re required to complete an IRS W-9 Form, you may come across terminology with which you are not familiar. Review the list below for explanations to a few common terms found on this form.

  • Taxpayer Identification Number (TIN) –For individuals, this is generally your Social Security number (SSN), but it can be an Individual Taxpayer Identification number (ITIN) if you don’t have an SSN. Business entities will complete the form using their Employer Identification Number (EIN).
  • Backup withholding – This is a percentage of income that is held from the taxpayer’s payments received and is remitted to the IRS. Backup withholding may apply when a taxpayer has not met TIN certification requirements or if they previously didn’t report income correctly to the IRS. If a taxpayer fails to certify their TIN and backup withholding status on IRS W-9, or similar statement, backup withholding may begin immediately.
  • Exemptions – This section of the W-9 tax Form applies only to certain entities, not to individuals. Entities that are exempted from backup withholding should enter the appropriate code found in the Instructions section. Entities that are exempt from FATCA reporting requirements enter the appropriate code found in the instructions section.

W-9 2020 – Is the form different than previous years?

While some tax forms update from year to year, the W-9 2020 has not changed from previous tax years. You can view the current W-9 on the IRS website.

W-9 for businesses

Need to complete a W-9 for your business? Check out this information on Form W-9 for businesses. In the post, you’ll find information about requesting W-9s for business vendors and contractors.

W-9 tax form questions

Do you have additional questions about IRS Form W-9 or need help filing your return? Our tax pros speak the tricky language of taxes and are committed to helping you better understand your return. Make an appointment today.

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