We all have been there. You prefer completing your tax return by yourself and end up swamped with paperwork and intricate calculations. The things may get even more confusing when you change your job or even your work status.
Suppose you were an ordinary employee in a company where the employer was withholding taxes on your behalf. Now when you’re self-employed it’s your responsibility to pay withholding taxes. It’s not easier for the company or business owner who contracts with freelancers. They must collect personal data from all independent contractors using W9 fillable form and then use it to complete Form 1099. It may be a challenge for a first-timer.
Though W-9 is quite self-explanatory there are still questions you may want to clarify. The first one is “who really needs the form”? In fact, you can take your W9 online free of charge on the IRS website, if your employer hasn’t sent it to you. It’s a simple request designed to confirm taxpayer’s identification information. Generally, the form is created for U.S. taxpayers only. If an independent contractor working for your company resides in another country you must send him W-8 instead.
Another common question from employees working in a company is: “what if I was sent W-9?”. If you’re a part of company’s staff with a regular paycheck it means that your employer now wants to work with you based on a contract. The main reason for such changes is financial difficulties that make it hard for employer to manage his employees taxes. If you feel uncertain about your work status, ask the employer for clarifications. Chances are that you can solve the misunderstanding. If that doesn’t help you may turn to the IRS to assist you with resolving the issue.