What Is a W-9 Tax Form?

W-9 forms request Taxpayer Identification Numbers.

A company or person that must provide an information return to an employer or a financial institution must include the proper Taxpayer Identification Number so that the IRS can properly track and reconcile items, such as income for contract work, mortgage interest paid and contributions made to an Individual Retirement Account.

Purpose

The IRS relies on information returns from financial institutions, companies and individuals that hire contractors and others to help track income, various property transactions and contributions made to an IRA. In order to properly match these financial transactions with the proper individual or business, the IRS must have the correct Taxpayer Identification Number. The taxpayer provides this number to the financial institution or contracting company on a W-9 form.

Types

There are two types of Taxpayer Identification Numbers: Social Security and Employer Identification. If you are filling out the form as an individual or sole proprietor, you will most likely use your Social Security Number. Partnerships and corporations will report their Employer Identification Numbers. A sole proprietor who has an Employer Identification Number may use that or his Social Security Number.

Form Recipient

Once you have properly filled out the W-9, you must submit it to the requester, not to the IRS. If you have the proper technology and the requester will accept an electronic copy, you can fill out the form online and send it to the requesting party via e-mail.

Special Form

There is a special W-9 form, a W-9S, that educational institutions and student lenders use to properly identify students who pay student loan interest or tuition.

Penalties

You could face significant penalties if you fail to furnish your correct Taxpayer Identification Number. The penalty is $50 for each occurrence. You could also be subject to a $500 penalty if you make a false statement on the W-9 that keeps you from paying backup withholding taxes.

References

• Internal Revenue Service: W-9 (PDF)
• Internal Revenue Service: W-9 Requester (PDF)
• Internal Revenue Service: W-9S (PDF)