Why are clients asking for a W-9 and what the heck is it?
So your past or current client wants a W-9
and you're sitting there like...
I totally remember having that same face when someone asked me for a W-9 when I was a Virtual Assistant and didn't have a clue.
What is a W-9?
A W-9 is a form from the IRS that let's people know what type of business you have (sole proprietor, LLC, S Corp, C Corp, etc) and other important info like your business name, address, and EIN (Employer Identification Number).
SPECIAL NOTE: If you don't have an EIN and are using your social security number instead, PLEASE get an EIN! It takes 5 minutes and is totally FREE! You can apply here.
Here's a look at a W-9. You can download one here.
Why do they need this information?
Have you ever heard of a 1099-MISC form?
It's the form a business has to file if they've paid a contractor to do services. It states how much the business paid the contractor to make sure that income gets taxed.
So if you are a sole proprietor or LLC and you were paid by cash, check, or ACH direct deposit, you will probably get a 1099-MISC.
Then why is there a place to check for corporations?
Most people don't want to remember what type of business you have!
So the W-9 becomes a blanket way for them to quickly figure out who needs a 1099-MISC form and who is in the clear.
If they're ever audited, they will have proof that all of their contractors were accounted for, and those that didn't get a 1099-MISC were in fact corporations.
Do I need to ask for a w-9 from someone?
Did you hire someone to provide you with services this year?
A coach, virtual assistant, ad manager, social media manager, designer, copywriter, etc - you need to ask all of these for a W-9 so you can know if you need to file a 1099-MISC form.
Need more info on 1099-MISC? We've got you covered with this post.
When do I need to ask for it?
The easiest way is to ask when you first hire someone. You can keep all of your W-9s in a cloud folder and refer back to them in January.
Most people will wait until December or even January to ask for W-9s.
Regardless of when you ask,
1099-Misc forms are due January 31, so you must have them before this!!