W-9's are an important piece of information on any individual or company, and should always be required before paying the person or business. A W-9 is an IRS document that provides specific information to the requesting party. The information that is included is very important because it lets the company writing the check know what kind of entity they are paying, a current address and tax ID number. These are all important to know when the business pays taxes because they are required by law to notify the IRS who they pay more than $600 throughout the year. Although this requirement is in place, there are exceptions for specific entities and no reporting is necessary. The following list breaks down the major sections of the W-9 and explains how they are important. Legal Name-this is the name of the individual or business that will show up on their tax return. Business Name-many times a company will have a DBA name or Doing Business As. They will use this instead of the legal name for general business purposes. Federal Tax Classification-this area of the W-9 is important when it comes to reporting on who a business has paid greater than 600 dollars throughout the year. The classifications include: Individual/Sole Proprietor-mainly regular people or people who personally own their own business. Must be reported on to the IRS. C or S Corporation-business that are incorporated. These are not reportable to the IRS come tax season. Partnership-any number of individuals who collectively own a business but are not incorporated. Must be reported on to the IRS. Limited Liability Company-a business that the owner can only be partly liable for collections if the company is dissolved, but not a corporation. Must be reported on to the IRS. Non Profits-not reportable to the IRS. Tax Identification Number-for an individual, this will be their Social Security Number. All other companies will have a federal ID number given to them when they register their business with the IRS. As one can see, the W-9 is a valuable document containing important information on an individual or business, and should always be required before payment is send to protect the paying company in the event of a tax audit. You can find the 1-9 form online which can be printed out with ease. Many companies keep a file of W-9 forms ready to be handed out to new hires.

W-9's are an important piece of information on any individual or company, and should always be required before paying the person or business. A W-9 is an IRS document that provides specific information to the requesting party. The information that is included is very important because it lets the company writing the check know what kind of entity they are paying, a current address and tax ID number. These are all important to know when the business pays taxes because they are required by law to notify the IRS who they pay more than $600 throughout the year. Although this requirement is in place, there are exceptions for specific entities and no reporting is necessary. The following list breaks down the major sections of the W-9 and explains how they are important.
Legal Name-this is the name of the individual or business that will show up on their tax return.
Business Name-many times a company will have a DBA name or Doing Business As. They will use this instead of the legal name for general business purposes.
Federal Tax Classification-this area of the W-9 is important when it comes to reporting on who a business has paid greater than 600 dollars throughout the year. The classifications include: Individual/Sole Proprietor-mainly regular people or people who personally own their own business. Must be reported on to the IRS.
C or S Corporation-business that are incorporated. These are not reportable to the IRS come tax season.
Partnership-any number of individuals who collectively own a business but are not incorporated. Must be reported on to the IRS.
Limited Liability Company-a business that the owner can only be partly liable for collections if the company is dissolved, but not a corporation. Must be reported on to the IRS.
Non Profits-not reportable to the IRS.
Tax Identification Number-for an individual, this will be their Social Security Number. All other companies will have a federal ID number given to them when they register their business with the IRS.
As one can see, the W-9 is a valuable document containing important information on an individual or business, and should always be required before payment is send to protect the paying company in the event of a tax audit. You can find the 1-9 form online which can be printed out with ease. Many companies keep a file of W-9 forms ready to be handed out to new hires.