Form W-9 (officially, the " Request for Taxpayer Identification Number and Certification ") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number ).
22-520: The form is never actually sent to the IRS; it is maintained by the individual who files the information return for verification purposes. The information on the Form W-9 and the payment made are reported on a Form 1099 . Form W-9 is most commonly used in a business–contractor arrangement. Businesses can use Form W-9 to request information from contractors they hire. When a business pays a contractor over $ 600 during
44-456: A $ 50 penalty for each instance in which Form W-9 is not filled out. Form 1099 Form 1099 is one of several IRS tax forms (see the variants section ) used in the United States to prepare and file an information return to report various types of income other than wages, salaries, and tips (for which Form W-2 is used instead). The term information return is used in contrast to
66-481: A Form 1099 for each covered transaction. Three or four copies are made: one for the payer, one for the payee, one for the IRS, and one for the State Tax Department, if required. Payers who file 250 or more Form 1099 reports must file all of them electronically with the IRS. If the fewer than 250 requirement is met, and paper copies are filed, the IRS also requires the payer to submit a copy of Form 1096 , which
88-424: A separate Form 1096. For the purpose of filing Form 1096, variants of certain forms are treated as separate types. For instance with Form 1099 , each variant (such as Form 1099-MISC and Form 1099-K ) is treated as a different form. In box 6 on Form 1096, only one box should have an "X" mark in it. Even if only one instance of each form was prepared, Form 1096 must be used. Form 1096 has two separate due dates to
110-463: A tax year, the business is required to file Form 1099-MISC , a variant of Form 1099 . To fill out Form 1099-MISC, the business may need to request information (such as address and Tax Identification Number) from the contractor, for which Form W-9 is used. The business does not send Form W-9 to the IRS. Another purpose of Form W-9 is to help the payee avoid backup withholding . The payer must collect withholding taxes on certain reportable payments for
132-443: Is a summary of information forms being sent to the IRS. However, 1096 is not required if 1099 form filed electronically. The returns must be filed with the IRS and sent to payees by the end of January immediately following the year for which the income items or other proceeds are paid. The law provides various dollar amounts under which no Form 1099 reporting requirement is imposed. For some variants of Form 1099, for example, no filing
154-399: Is reported on Form 1099, in contrast to a "W-2 employee" who receives Form W-2. Blank 1099 forms and the related instructions can be downloaded from the IRS website. Payees use the information provided on the 1099 forms to help them complete their own tax returns . In order to save paper, payers can give payees one single Combined Form 1099 that lists all of their 1099 transactions for
176-407: Is required for payees who receive less than $ 600 from the payer during the applicable year. For Form 1099-NEC in particular, businesses are required to submit a form for every contractor paid more than $ 600 for services during a year. This requirement usually does not apply to corporations receiving payments. See the table in the variants section for specific minimum amounts for each form. The form
198-548: Is used to report income, proceeds, etc., only on a calendar year (January 1 through December 31) basis, regardless of the fiscal year used by the payer or payee for other Federal tax purposes. As of 2015 , several versions of Form 1099 are used, depending on the nature of the income transaction. One notable use of Form 1099 is to report amounts paid by a business (including nonprofits) to a non-corporate US resident independent contractor for services (in IRS terminology, such payments are nonemployee compensation ). The ubiquity of
220-411: The "Annual Summary and Transmittal of U.S. Information Returns" ) is an Internal Revenue Service (IRS) tax form used in the United States used to summarize information returns being sent to the IRS. Information returns are sent by the issuer to recipients as well as the IRS, but Form 1096 is not sent to the recipients; rather it is only sent to the IRS. Form 1096 is only used if one is physically filing
242-456: The IRS. However, if the payee certifies on the W-9 they are not subject to backup withholding they generally receive the full payment due them from the payer. This is similar to the withholding exemption certifications found on Form W-4 for employees. Financial institutions sometimes send Form W-9 to a customer to request information. However, it is not necessarily required for the customer to fill out
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#1732876036341264-417: The accompanying forms with the IRS. If one files the accompanying forms electronically, then Form 1096 is not required. When more than 250 information returns (e.g. Forms 1042-S , 1098, 1099 ) of a single type are filed for the calendar year , one is required to file all forms of that type electronically with the IRS, in which case Form 1096 is not used for that type. Each type of form must be sent with
286-480: The amount of the taxpayer's "basis" in the real estate sold. (Basis is usually the amount of cost incurred by the taxpayer when he or she acquired the property, perhaps years before the sale.) The taxpayer's basis amount is deducted by the taxpayer (on his or her own tax return) from the proceeds amount to determine the gain (if any) on the sale. In any case, the payee-taxpayer remains responsible for filing an accurate Federal income tax return. Each payer must complete
308-409: The correct amount of total income on his or her own Federal income tax return regardless of whether a Form 1099 was filed. For a variety of reasons some Form 1099 reports may include amounts that are not actually taxable to the payee. A typical example is Form 1099-S for reporting proceeds (not gain) from real estate transactions. The Form 1099-S preparer will report the sales proceeds without regard to
330-459: The entire year. Taxpayers are usually not required to attach Form 1099s to their own Federal income tax returns unless the Form 1099 includes a report for Federal income tax withheld by the payer from the related payments. The issuance or non-issuance of a Form 1099 in a particular case is not determinative of the tax treatment required of the payee. Each payee-taxpayer is legally responsible for reporting
352-522: The form has also led to use of the phrase "1099 workers" or "the 1099 economy" to refer to the independent contractors themselves. In 2011 the requirement was extended by the Small Business Jobs Act of 2010 to payments made by persons who receive income from rental property. Form 1099 is also used to report interest (1099-INT), dividends (1099-DIV), sales proceeds (1099-B) and some kinds of miscellaneous income (1099-MISC). Blank 1099 forms and
374-406: The form if the institution already has the requested information from when the customer opened an account. In an employer–employee arrangement, Form W-9 and Form 1099 should not be used. Instead, the corresponding Form W-4 (to provide information) and Form W-2 (to report the amount paid) should be filed instead. However, an employer may still send Form W-9 to have the information on record that
396-415: The information sent and […] all occasions of user access that result in the submission [are documented]", that the person accessing the system and providing the information is the individual identified on the form, and that an electronic signature is used. Some certified public accountants consider it best practice to ensure the completion of Form W-9 by payees before issuing any payments. There may also be
418-401: The payee doesn't need to be sent Form 1099. Form W-9 can be completed on paper or electronically. For electronic filing, there are several requirements. Namely, a requester who establishes an electronic filing system must ensure that the electronic system provides the same information as on a paper Form W-9, that a hard copy can be supplied to the IRS on demand, that "the information received is
440-493: The payments totaled at least $ 800 during the year. The payor was required to report the name and address of the payee and the total amount of payments on Form 1099 and sent to the Internal Revenue Service by March 1 of the year following the payments. The payor was required to include Form 1096, a letter of transmittal and affidavit certifying the accuracy of each Form 1099. Form 1096 Form 1096 (officially
462-699: The related instructions can be downloaded from the IRS website. The following table provides information for each variant. Note that for those who have electronic filing of Form 1099 set up, the due date for the IRS is March 31 rather than the last day of February. Reduced in 2022 to $ 600 and no minimum number of transactions. The War Revenue Act of 1917 required every entity to report certain payments made to another entity. Payments subject to reporting included payments of interest, rent, salaries, wages, premiums, annuities, compensation, remuneration, emoluments, or other fixed or determinable gains, profits, and income. Payments to an entity were required to be reported if
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#1732876036341484-417: The term tax return although the latter term is sometimes used colloquially to describe both kinds of returns. The form is used to report payments to independent contractors , rental property income, income from interest and dividends, sales proceeds, and other miscellaneous income recipients to tax professionals. This has led to the phrases "1099 workers" and "the 1099 economy" to refer to those whose income
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