IRS Tax Season 2024: What is Form W-9 and how to obtain it?
Some may require a W-9 to report their income to the IRS, what is this form, and how can you obtain one? We took a look.
Tax season is underway in the United States, forcing many to get their finances in order. The W-9 is one of the lesser-known forms taxpayers may need to use to report their income and other financial information to the IRS.
What is a W-9?
According to the IRS, the W-9, known formally as the Request for Taxpayer Identification Number and Certification, is used “to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS to report.” This could take the form of income paid for work, transactions related to real estate, interest paid on your mortgage, debt cancellation, or any contributions made to an IRS, to provide just a few examples.
If you do not own a business or are not an independent contractor, you probably will not need to submit or deal with W-9s.
READ ALSO: Missing a W-2? Here’s your guide to requesting one from the IRS
How can you request a W-9?
Companies or individuals who employ contractors can use the W-9 to ensure that both parties are aware that it is the responsibility of the contractor to pay taxes on their earnings. The certified W-9 demonstrates that the IRS knows no income has been withheld from the contractor.
The tax authority has provided an in-depth video on how this form is to be filled out, which includes tips from frequently asked questions by businesses and contractors.
The PDF of the form can also be found on the IRS’ website.
Other changes to keep an eye on
Under the American Rescue Plan, Congress lowered the minimum income needed to prompt a third-party retailer or mobile payment servicer to send a 1099-K to users. This means if you do business on a site like Poshmark, Etsy, or eBay and make more than $600 a year, you may receive a 1099-K, a reminder that this income has already been reported to the IRS. Additionally, if your business accepts Venmo or Paypal payments, the same rules will apply.
The new rule was supposed to go into effect last year, but due to issues and delays by the platforms and the IRS, the implementation has been delayed. This means that for tax year 2023, unless you receive at least two hundred payments valued at over $20,000, you will not receive a 1099-K. This does not, however, mean that this information does not need to be reported to the IRS.