Outside Consultant: What are reasons for using a W-9 form?

  • Updated: July 6, 2014 - 2:00 PM

question

I recently acquired a new client for whom I will provide blog posts and some social media content.

She asked me to fill out a W-9 form, even though in my eight years in business, I’ve never been asked to do so before.

My billing goes out in the name of my company, and payments are made to Gelmtree Advertising, not me personally. What are the reasons/advantages of asking for a W-9?

Carole Holden

Gelmtree Advertising

answer

Not to worry. The W-9 form is the standard form used to request your tax-relevant information such as your name, address and tax identification number. Also, it allows you to avoid backup withholding. The business requesting the W-9 may need to withhold taxes on certain reportable income if it does not have a W-9.

The W-9 form is often used for independent contractors and subcontractors. From your description of providing some blog posts and social media content, it sounds like you are a contractor. The information on the W-9 is used to issue a 1099. The form is never sent to the IRS. Instead, it is kept by the business for its records and used in the event of an audit.

Depending on how your business is organized (partnership, LLC, S Corp or C Corp), you may feel that you should not have been issued a 1099. This may be the case, but the only way the business that contracted with you can verify that is to have you complete the W-9. It may be standard practice by the business to ask all new contractors for a W-9.

Additionally, even some businesses may be given a 1099 and thus required to complete a W-9.

For instance, a single-member LLC may elect to be taxed as an individual. As such, this LLC should receive a 1099, and it would be required to submit a W-9.

If you have additional concerns or questions, it may make sense to personally consult with a tax professional who can assess your individual needs.

About the author

Tim Lacine, University of St. Thomas

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