How to complete Form W-9 – Here’s how independent contractors, vendors, self-employed individuals, and entities can easily fill out Form W-9.
To give you some context, Form W-9 is sent by the payer (a business that is hiring an independent contractor) to the payee (the independent contractor) to obtain certain tax information, such as the taxpayer identification number, name of the vendor, business name, and other regulatory information.
Contrary to popular belief, filling out and sending the completed Form W-9 is actually pretty simple. While the task may seem a bit boring, with the right information by your side, you can easily be done with the process in less than a few minutes.
We recommend taking your time to validate the information prior to reporting it on the form to ensure that you are furnishing relevant and accurate information.
Step-wise Instructions to Complete Form W-9
Step 1: Enter your name. This should be the same as the name provided in your personal income tax return. This field cannot be left blank.
Step 2: Enter the name of the entity. This entity name is your business name and the payer will process payments to this entity.
Step 3: Select the federal tax classification that best applies to you.
Step 4: Enter the tax exemption code which relieves you from certain tax withholdings. If your organization is not exempt from withholdings, you may leave this blank.
Step 5: Enter the complete address of your business in this field. These inputs will be used by the payer to validate and mail you the copies of returns.
Step 6: Enter the city, state, and zip code
Step 7: Enter the account numbers which would primarily receive the payments from the payer. This is optional and you can leave this blank if you’re unsure of the details.
Step 8: Provide your social security number (if you’re a self-employed individual) or EIN (if you’re an entity)
Step 9: Sign and certify that the information furnished in the form is accurate and true to the best of your knowledge.
Step 10: The most important of all; Review the details before you send in the completed form to the payer to verify all the details per the official IRS records. You can even go a step ahead and check your TIN against the IRS records with Tax1099’s TIN Matching to make sure that the furnished TIN and name details match the real-time records of the IRS.
Why is W-9 Solicitation Important?
The IRS sends B-notices to businesses that report incorrect TINs in the returns. When the notice is ignored, the IRS hits back with a monetary penalty, making it very difficult for the business to function with tax stressors.
It is important to note that each incorrect TIN would cost you approximately $250 in penalty. And this amount goes further up when the initial penalty accrues interest every month until the amount is paid in full.
The IRS encourages businesses to focus on validating the information thoroughly prior to reporting and even use tools like real-time TIN Matching to ensure reporting accuracy.
W-9 Forms are the starting point of compliance. If you manage to get the vendor tax details accurately, you are taking at least 50% of the stress away from your accounting teams during the year-end rush and saving them time.
How to Automate Bulk W-9 Solicitation?
Businesses can easily automate their bulk W-9 solicitation by integrating Tax1099’s Bulk W-9 Solicitation into their business process.
It’s easier than you think.
All you have to do is import your vendor lists to Tax1099 and validate the vendor TINs against the real-time IRS records. For this, you can leverage Tax1099’s real-time TIN Matching
You can further validate the vendor addresses with Tax1099’s bulk address validation solutions.
The validated information is populated across the required returns automatically, saving you time spent on manual processes.
If you’re in a hurry and do not have the time to follow the above process, you can simply have our team take care of your bulk W-9 solicitation requirements.
All you have to do is get in touch with us and we will take it from there.