Whether you an employer, operating a prosperous business, or simply a housewife who occasionally invites a plumber to mend some burst pipe, everyone has to take tax responsibilities seriously. As soon as you engage in a business relationship with independent workforce, W-9 comes into play to regulate agreements.
However, a large number of vendors as well as organizations turn a blind eye to papers and then end up being in the red because of subsequent penalties just because their did not take care of printing out a blank in time. But fear not, as we are going to discuss these intricate matters further.
When do I need a W-9?
In case some company pays an independent contractor for services more than $600 over a tax year, this company must obtain a blank that provides the contractor’s tax identification number, name and other information required by the IRS. If a business does not have forms for vendors they have paid, then it is obligatory to request one unless they want to come across fines up to $500 per incident. Thankfully, W-9 form 2019 printable can be easily downloaded basically anywhere – at the IRS official website, for example. Yet you do not need to worry about the $600 rule if external labor and services are paid less than that.
Unless contractors are trying to avoid paying taxes, there is no real reason not to provide a blank. In any case, any organization will be requested to prepare 1099-MISC by the end of the calendar year, whereas W-9s are actually used for accounting purposes to report payments to hired workforce and not shown directly. If one $600 plus free worker is missing in your records, there is still a chance to ask for a form. Otherwise, businesses are supposed to withhold payments to turn these amounts over to the IRS, at the rate of 28%. Incorrect withholding or false statements lead to a $500 penalty per instance.
Filling Things Out
As an employer, you simply collect the taxpayer’s identity numbers by forms. And contractors do not have to walk through some tedious process to complete a blank – there is even a special editable version which is filled out digitally. Various formats from .pdf to .doc are available, too. So neither party would have a sleepless night under tons of papers. Just remember that W-9s are aimed to help manage taxes, not to complicate matters.