Have You Ever Heard About The W9 Form? Read This Article Till The End Before Filling Out Your W9 Form 2021 Printable.
Talking about tax will require us to understand better about relevant forms to fill out. One of those tax-related forms is the W9 form. This form is popular amongst people who work as freelancers, but it isn’t just limited to them only. The article below will show you an in-depth explanation of the W9 form 2021 printable. Here you can also find people’s FAQs as well.
What is a W9 Form?
Just like its title on the document, which is ‘Request for Taxpayer Identification Number and Certification’, a W9 document is a tax-related document given by an employer to someone who is working with them temporarily.
Furthermore, it can be explained as a document issued by Internal Revenue Service (IRS); which is given to someone working individually by an individual or an entity in order to request their personal information and Taxpayer Identification Number (TIN).
Who Has to Fill It Out?
As mentioned above, the one that is required to fill the form is those who work as an independent entity. This will include freelancers, independent contractors, or self-employed entrepreneurs whose service has been used by a certain party.
In addition to that, the minimum amount of compensation or reimbursement is $600 per year. People whose service costs under that amount need not fill in this form.
To give a realistic example, let’s take an example. Let’s say you are a freelance copywriter that works with ABC Company. You are assigned to do a copywriting job that is worth $200 per job. Turns out that your writing is well-received and the company asked you three more times with the same payment. Hence, your total payment from that company is $800.
At the end of the year, the company will send you a W9 form. This is because the payment they paid has surpassed the minimum amount of $600. There you should be given the filled form and hand them the file. Or, if the company is not giving you the file, simply download a W9 form 2021 printable that you can get online.
How Do I Get a W9 Form?
Aside from getting the blank W9 form from the party who requests the information itself, the W9 form 2021 printable can be obtained from IRS’ official website. Note that even though you get the file from the IRS official website, you should return the filled-in document to the employer.
The interesting thing about the W9 form is, you do not have to print the form and fill it in with pens. Your information can be directly typed through your PDF reader. Once you have finished filling it, all you have to do is to save the file; hence you can send it directly to the employer.
What Should Be Included In The W9 Form?
A W9 form is a document that requests out some personal information and Tax Identification Number from an independent, temporary worker. The information required in a W9 form will include these things:
- The W9 form requestee’s full name. It is important to write the name to be the same as shown on that person’s income tax return. Remember not to leave this line blank.
- Business name, if the name is different from the name written in line 1.
- Federal tax classification of the person whose name is stated on line 1.
- Address (including the city, state, and ZIP code)
- Requester’s name and address, as well as the list account numbers; but these are optional
- Taxpayer Identification Number (TIN) that can be filled out with Social Security Number (SSN) or Employer Identification Number (EIN). For individuals, typically they will fill in with their SSN number. If you are a service provider with another kind of entity – let’s say, a single-member LLC then you should input the Employer Identification Number instead of the Social Security Number.
- Certification. In this section, it is the one who fills the W9 form that will be required to sign the form.
Aside from those aforementioned aspects, you can also find the general instructions to fill in the W9 form. There, you can find some explanation about backup withholding, FATCA reporting, the purpose of filling this form, and the specific guideline to help you out while writing down your information. The specific guideline is really helpful if you do not know what to fill the blanks with; especially in the ‘Exempt payee code’ blank.
To be briefly said, the W9 form 2021 printable is not a difficult document to fill in. Filling this form will take less than 10 minutes once you understand well the document’s aspects. Plus, filling the form will be done quickly if you’ve already prepared the information required, such as your SSN or EIN number.
Who Is Exempt From The W9 Form?
Some people may be confused when they are faced with filling this ‘Exemption’ line. According to the IRS information, this exemption line should be filled if you are exempt from FATCA reporting and/or backup withholding. You should fill in the blank provided with the appropriate code.
What is backup withholding and FATCA reporting? The explanation of these things will be provided as follows:
Backup withholding is required to a payer if the one requested to provide the TIN when required fails to report the payments subject to backup withholding. Backup withholding is applied to almost all kinds of payments which are reported on form 1099; some of the examples will include:
- Interest payments
- Rents and profits
- Commissions, fees, and other kinds of payments you receive from performing as an independent contractor/freelancer
- Royalty payments.
FATCA itself is an acronym for Foreign Account Tax Compliance Act. FATCA reporting itself means that all non-U.S. financial institutions or non-financial institutions will be required to search for and report their customers’ assets to the IRS. FATCA reporting will be required if the customers’ assets are related or coming from U.S. bank account holders.
How to Fill W9 Form Correctly?
As mentioned earlier, filling in the W9 form is relatively easier and does not take much time. Even with 10-15 minutes, you can finish making a finished file to be submitted later.
If you download the W9 form, you will get a 6-page form that also includes comprehensive general instructions as well as specific instructions. To fill a W9 form 2021 printable, it will be better if you read the specific instructions before you fill in the form. There, you will know how to fill in a specific line and you can refer to those instructions if you fill lost.
W9 Form 2020 vs. 2021
To be briefly stated, there is no difference between the W9 form from 2020 and 2021. This is because the latest revision of this form is made in 2018, and there are no further revisions made since. There is a previously used W9 form uploaded on the IRS website. Although in general, these forms are similar, the 2018-design form involves a simplified form.
The reformation of the W9 form made in 2018 involves only this thing: the change of withholding flat rate from 28% to 24%. The adjustment is effective since October 2018 and there is no slightest change until now.
Frequently Asked Questions (FAQ) & Answers
Is A W9 The Same As a 1099?
The W9 form 2021 printable serves differently compared to the 1099 form. While W9 is filled out by the independent contractor/freelancer, while the counterpart – 1099 form is used by the employer to report about their temporary hiring to the IRS.
Can You Refuse To Fill Out A W9?
Yes, you can decline to fill out the form if you think it’s suspicious for the requester to ask so. In order to request filling a W9 form, they should have a legitimate reason why you have to provide it.
What Happens If You Don’t File A W9?
Well, you can be penalized or be subject to backup withholding. The backup withholding means that your payment will be withheld by 24% in addition to preceding the case to the IRS.
What Dollar Amount Requires A W9?
The W9 form 2021 printable is required if you are paid with a minimum amount of $600 per calendar year for labor and services. In case of direct sales, the W9 form is required if the purchases exceed $5,000.
Is The $600 Unemployment Taxed?
Unfortunately, yes, it is taxed. This is because the unemployment benefits are considered as taxable income; despite the fact that unemployed people don’t need to pay for Medicare taxes and Social Security.
How Will A W9 Affect My Taxes?
If you decide to fill out a W9 form, then the company (the employer) will not withhold any taxes for you. Ensure you to report the right SSN/EIN hence you can ensure the right amount of taxes should be paid.
Filling out the W9 form 2021 printable form should be done accurately. This will make sure the tax-related processes can be carried out seamlessly and without any significant hassle to tackle. For further assistance related to this document, reaching out to your financial advisor is a great step to do.