IRS forms are tax forms used by taxpayers and tax-exempt organizations to report financial information to the Internal Revenue Service (IRS). In which these forms are used to report income and calculate taxes owed to the government. IRS forms W-9 serves two purposes, one is used by third parties to file an information return with the IRS on reportable payments made to others. The second purpose is to help the payee avoid backup withholding. This form is also used to determine if an organization will qualify to receive an Information Return which will be used with the Form W-9.
These steps will guide you on how to prepare in filing an IRS Form W-9.
- First determine whether the person/entity is an employee of your company. If not, and during the year you have paid them over $600 you will issue that entity/person a 1099. The 1099 will use Form W-9 to obtain all the important information.
- Next, you will prepare a formal letter for submission to the person/entity that you want to fill out the W-9. The formal letter must contain the reason on which it describes why the person/entity needs to complete the W-9 Form.
- Obtain a copy of the IRS Form W-9. You can obtain a copy of the IRS Form W-9 at this URL: http://www.irs.gov/pub/irs-pdf/fw9.pdf
- Copy and paste the Contents of the Form and forward it to the person/entity that you will be issuing a 1099. Make sure that they fill out the whole W-9 Form including their Employer Identification Number (EIN) and their signature.
- You can then use the information gathered on the W-9 Form to prepare the 1099 and issue it after doing so. You can save the W-9 Form for your records.
Additional Information about the Form W-9 and Form 1099 are as follows.
- The W-9 Form requests the name, address, and taxpayer identification information of a taxpayer (Social Security Number or Employer Identification Number which is either known as TIN (Taxpayer Identification Number). This form is maintained by the person who files the information return for verification purposes and is never actually sent to the IRS.
- The payer must collect withholding taxes on certain reportable payments for the IRS. However, the payee receives the full payment due from the payor if he/she proves or certifies that they are not subject to backup withholding exemptions on the W-9.
- The Form 1099 is used to report proceeds, income and others, only on a calendar year from January 1 to December 31. The returns with the IRS must be filed by the end of February immediately following the year for which the other proceeds are paid. However, by the end of January, copies of returns must be sent to the payees.
- Some of the Form 1099 reports might include amounts that are not supposed to be taxable to the payee. This is because of a variety of reasons depending on the variant of the Form 1099.