While there is absolutely nothing particularly difficult in completing a W9 form, there are some caveats that you have to know about in order to avoid legal issues. First and foremost, a business entity (whether you are an LLC or a sole freelancer) must send only correct information.
What to do if a bank wants me to fill out the form?
Usually, you will receive a blank with business mail. However, if you received a request, you can get it for free online: go to the IRS website and download it. Why do you have to comply with the request in the first place? Are single members requited to file out it? Let’s tackle these questions:
- A W9 does not require you to provide sensitive information
- Only the entity that enters a business relationship must provide the data
- Failure to comply leads to fines
In theory, you can ignore the request. However, you will need to pay a $50 fine for each instance of failure. The fine can be increased to $500 if the employer decides to forward the process to the IRS.
Send only correct info!
Here is a simple table that will explain to you what types of information you will need to provide:
|Personal data||The name of the person engaging in a business activity, the name of the entity if not corresponding with the name, your address, city, state, and ZIP code, TIN and EIN|
|Exemptions||If you are a subject to exemptions, fill it out|
|Federal Tax Class||Tick appropriate boxes|
If you send out incorrect information, it can be considered a fraud. Note that sending out false data can lead to prison!