With the United States‘ tax season underway it would be prudent to start collecting the necessary information in order to avoid any penalties in the form of late fees.
While employees usually have their income taxes deducted at the time of payment, employers have a few additional forms to fill out, one of which is the Form W-9.
What is the W9?
The Form W-9 in essence is an identity verification form that is used to collect your Taxpayer Identification Number (TIN) or Social Security Number (SSN). The form is important as it enables you to get information about vendors, independent contractors, sole proprietors, or freelancers.
You will also need a seller’s W-9 if you pay them anything above 600 dollars during the financial year, you are filing taxes.
The W-9 form for 2023 can be accessed on the IRS website, with the entity also providing a comprehensive document on the details of the form and how to go about filing the form.
Best Practices for W9
One of the best practices when it comes to W-9 forms is to request an updated W-9 form annually. The other thing to keep in mind is to request a Form W-9 from any vendors you solicit before making your payment.
The other things to keep in mind is to review W-9 forms thoroughly and ensure all the required boxes are completed appropriately, and that the taxpayer has signed the form.
This will also offer you a layer of protection should the IRS get in touch with you over any incorrect information you may have entered while filling out your tax return for the year.
What is a W9 used for?
The best use for a W-9 form is that it provides information about a particular vendor and certifies its completeness.
The other use for a W-9 is that it also allows you to prove whether or not you need to provide information returns for the vendors in question for each particular year.