The form is the most widely used in businesses. If talking about its definition this is a request of TIN and Certification to get information from vendors they employed as freelancers. When a firm pays to an independent contractor $700 or more over due to the course of a tax year, it is necessary to inform about these payouts to IRS. Businesses use the name, address and Social Security or TIN from W-9 doc to complete form 1099-MISC.
Businesses company that hires individual do not refrain revenue tax or pay Social Security or Medicare taxes for freelancers who work there, as they do with their hired workers; as only contractors are accountable for these responsibilities. Nevertheless, IRS still has a desire to be informed about the amount of salary the contractors get to get sure, they pay the taxes they obliged, and gov uses paper 1099-MISC to collect such information. Businesses do not send document blank W-9 2018 to IRS Florida or any other USA state.
Why it is required?
Freelancers, employees, and business companies need to get sure W-9 copy is completed, signed, filed, and updated.
There is a requirement for the freelancers to pay taxes on the profit they earn and apply some document to IRS annually. To implement that, it is needed to fill 1099 paper and send it to each company the individual worked at. To get the guarantee the freelancer will receive his 1099s in time of taxation season, it is necessary to complete and send blank to each firm before start working on any projects for these companies. This helps to get all needed information to file their taxes with IRS, and to create and send 1099 copy.
If the employer controls payroll of the company, it’s important keeping the completed paper on file or online to be able giving it any time to each of his supernumerary workers who implements active work. Hirer has to use W-9 identification to set up payroll and to make W2s and 1099 docs for all of his hired people and contractors during taxation season every year.