Being a small business owner or independent contractor comes with obligations that no one tells you about. One of these happens to be the surplus of forms and documents you'll have to fill out and maintain. And today, we're going to talk about one of the most easily overlooked forms until you have it sent your way or receive a request for it from a client: Form W-9.
Form W-9 is a simple form for businesses that can be found and downloaded from the IRS' official website. It doesn't take much time to fill out, with only your name, your address, your business classification, and your tax identification number being mandatory. That information is then kept in your personal records to be used with any Form 1099-MISC or 1099-NEC for the year.
You must receive a W-9 from any U.S. based contractor or entity whom you've done business with as a client. Specifically, if you have paid them more than $600.00 in a year, you must ask them to provide you with one for your records. Likewise, you must provide the form for any contractor or entity if they paid you more than $600.00 in a year.
The form itself basically exists so that you can provide the proper tax identification number on your filings. Failure to do so will result in being fined for negligence, and attempts to falsify the information runs the risk of imprisonment. So rather than dealing with unnecessary consequences, you should fill out a Form W-9 at the start of each year to have it available to send to your clients and request it before doing work for others.