How to Use a W-9 to Report Income

Anyone who generates income apart from the traditional employee-employer relationship is encouraged to report their income to the IRS with a W9 form. This form is fairly easily to complete and actually looks more difficult than it really is. Once you have downloaded the form from the IRS's website, just follow these few simple steps and you'll have your W9 completed in no time.

Instructions

1. Fill in your full personal name and the official registered name of your business if it differs from your personal name.

2. Put a check mark in the box that best describes your situation. Choose from "Partnership," "Corporation," "Sole Proprietor/Individual" or "Other." If you select "Other," then indicate whether you're exempt from backup withholding.

3. Enter your full address. Write in any applicable account number(s) or Requester's name and address if necessary.

4. Write in your TIN (Taxpayer Identification Number). This is either your SSN (Social Security Number) or your EIN (Employer Identification Number). The TIN must match the name written on the first line to avoid backup withholding. If there is more than one name on the account, then refer to the chart on page 4 of the W9 form for guidelines.

5. Read the "Certification" section completely. Then, sign and date on the line provided.

6. Submit the completed form to the Requester.

Tips & Warnings

• Most people will check the "Individual/Sole Proprietor" box. The "Corporation" and "Partnership" boxes apply only if you have a registered business name in the form of an LLC or other registered entity.

• All the information you need to provide is requested on page 1 of the W-9 form. Pages 2 to 4 don't need to be returned to the requester, they simply provide guidelines to help you complete the W-9 correctly.

• Sole Proprietors and Individuals, typically, don't qualify for backup withholding exemption. Corporations may qualify for exemption in special cases.

• If you willfully fail to provide the incorrect TIN, you will be penalized up to $50.

• You will be penalized $500 if you provide untrue information that causes you to be exempt from backup withholding.

• You may be charged with criminal penalties along with imprisonment and/or fines if you willfully falsify affirmations or certifications.

Resources

• The IRS's Official Website