Companies that work with both hired individuals and independent contractors know that the tax reports between these two cases differ.
That’s why before filing your 1099 template, you should have all the information from the company or person who provides the services to you. This is where the w9 form 2019 comes into play.
You can request this document from any non-employed individual or organization that is providing their services to you. Simply explain that it’s needed to create an accurate report and that any included information will help you avoid penalties from the IRS. The company, in turn, issues to the person one of the 1099 copies.
Independent Contractors Identification
The IRS W-9 is very similar to the W-4, in the sense that it's an informational return, including payment, tax, and personal details.
It helps to identify whether the applicant works as a contractor, vendor, sole proprietor, partnership or corporation. Additionally, the form helps to identify the citizenship of the individual.
You can know who may be considered an official employee and who isn't, by using the following criteria:
- If you and the person signed a job contract proving that he or she is hired by your firm, then he/she is an employee.
- Independent contractors are not limited by working hours and they are not under strict business control. For example, they do not necessarily need to report their presence to you. Their job performance is more important than the presence in the workplace.
- Independent contractors can also work on a regular basis, but they’re not hired officially.
- An employee’s compensation is under the control of the employer, but independent contractors are meant to be their own businessmen (in a sense). That is why they can make their rates higher anytime they like. Also, the firm can refuse their services and start working with another representative any time they like without any approval from the other party.
The w9 form printable may be required from freelancers, cleaning companies, organizations that provide IT support etc.
How to File the Form?
Once the request for the document is received, find the latest edition of W-9 sample. The latest version was released in September 2017.
Just upload the printable version from the official Internal Revenue Service website and complete it. It’s easier to fill out the blank in a digital format because it's much more convenient to share.
You will need to provide the following information in the 2019 w9:
- The name of the applicant, completing the document and the business name. If they are the same you can leave the second cell blank.
- The next part identifies the organization or people filling out the sample. Those who do not own any entity can just put a checkmark in front of the “Individual” option. In the other case, specify what classification your business is considered to be for tax payment purposes.
- Exemptions are not applicable to most individuals. Only entities are. To know more, read the instructions.
- The full official address of the company is also required.
- For the IRS to correctly identify the taxpayer, include the Taxpayer Identification Number or the Employer Identification Number. In case you don’t have either of them, add your Social Security Number. If you have applied for it, but haven’t got it yet, mention this in the template.