Do I need to give them a W9 Form?

Business
1

I have been doing design work for a startup non-profit, on and off, for the past few months. I have dealt directly with the owner, we have had a very simple and pleasant arrangement, she requests something, I do the work to her satisfaction, I send her an invoice, and she sends me a check.

Recently, she turned the business part over to an independent contract “business person”, accountant, or whatever they are, and this person has (despite being rude as heck) decided to make some problems for me and tell me that she cannot pay me anymore unless I fill out and turn in a W9 form to her.

I told her that I dont think I need to give her a W9 as I am not a contractor for the non-profit, I am only selling a service (I used an analogy of someone who comes to clean the carpet, i know HE doesnt have to fill out a W9).

Anyway, this is my first time dealing with this kind of request (although, unfortunately, not my first time dealing with this kind of person) …and I was wondering if there is someone who knows about these things better than I do.
Thanks.

2

Businesses are required to file W-9 forms for the independent contractors they hire.

Here’s the description.

Fill out the form.

3

I don’t feel comfortable with it, maybe its just that this woman has used it as a power issue, basically telling me that she will not pay me (for work I have already done) until/unless I fill out this form and give it to her.
I feel that I should have been informed that the ‘terms of business’ were going to change either before I was asked to do the last project, or after I was paid for it. Not after I did it, and then have my pay withheld until I agree to these new terms.

4

This is a discussion I’ve had many times before–I used to be the person in charge of collecting W-9 forms from vendors & contractors for a large school district.

“Selling a service” is “being a contractor”. That person who cleans the carpet? He–or his employer–is obligated to fill out a W-9 and submit it to the company requesting it. (I’ve also been the guy cleaning carpets, and I remember all the paperwork required).

Non-profits & government agencies can be especially particular about this because their tax filing is so different from normal corporations.

At the school district, the rule was very clear: If we pay you (as a person or a company) 1¢ or more for goods or services, you are required to fill out a W-9. This also includes employees working outside of their contractual employment (a math teacher who gives a workshop about playing piano would be paid as a contractor, not an employee, for the purposes of that workshop).

Regardless of the personality of the accountant, she’s right.

5

They aren’t “new terms”. She is telling you that she won’t pay you unless you comply with the law. I think most people feel that way. The form is easy to fill out. However, if you’re willing to risk your project, future work with this client, and lose referrals and a good reference, that’s your call.

6

Just to be clear: These “terms of business” are also known as “Federal Tax Law”.

7

Why is it that I have never been asked to fill out a W9 before with the other companies I have done websites for? I just print up a contract and we both sign, I do the work to their satisfaction, and they pay me. There was never any request for a W9 in the past years that I have been doing this. ???

8

They have to have the w9 form so you must give them one or they will not pay you. You do not have a choice.

9

I disagree, you always have a choice.

10

Here’s what it says on the form

Payments over $600 required to be reported and direct sales over $5,000

As to why other businesses haven’t asked you to furnish the information, you’d need to ask them. Apparently, your present client doesn’t want to play fast and loose with the IRS and has hired an accountant to make sure he is in compliance.

W9 Forms are a fundamental element of doing business as an independent contractor in any field. If you are doing business as an independent contractor, you should familiarize yourself with the fundamentals.

In this case, your “choice” is to comply with the law and your client’s request via his accountant or not be paid.

11

Just to be clear, a W9 form is a form that a contractor or employee gives TO a client or employer. The only reason an employer will give a w9 TO an employee is to make sure they have a blank one so that they can fill it out and return it.

By law, an employer must keep a completed, signed, W9 form in file for each employee that that they have. If they have a contractor who they will send a 1099 at the end of the year, they must have a signed W9 on file for that employee.

The purpose of the W9 is really just to have a sworn statement from the employee/contractor saying ‘this is my SSN or Tax ID’.

So, if you are an individual, sole proprietor, or full time employee then you MUST complete and return a W9 to the person who’s paying you, by law.

If you are a corporation/LLC then you are NOT obligated to provide a W9 and the employer/client is NOT obligated to send you a 1099. However, some companies will still want to to it. You can refuse, they can insist, you can decide how you want to handle it.

For me, I will of course sign/submit a W9 if I am working as an individual (which I don’t do). For my company, our clients aren’t required to do the w9/1099 thing so I refuse to do it when I’m asked.

The reason is that a vendor who requests that a corporation like mine do a w9 usually doesn’t realize that it’s not required by law, and people who don’t understand taxes are more likely to make tax mistakes. I had such a client send a 1099 to the IRS with the wrong amounts on it, and that was a hassle for me.

Your interpretation of the word ‘contractor’ and the carpet cleaner analogy is incorrect. If you are providing a service and getting paid for it, you can be considered a contractor. The only provision I know of is that there’s a threshold under which you don’t have to file w9/1099, and I think it used to be about $600 but I’m not sure about that.

Basically, if you are required to file a W9 and you aren’t planning on cheating on your taxes you should have no problem with it.

12

I have worked for this client for 4 months, I have been getting paid this whole time without a W9. Each project has been a separate entity, the requests for work were spontaneous and not steady, and no payment for any project was as much as, let alone more than, $600.

According to what you wrote:

Payments over $600 required to be reported and direct sales over $5,000

Would imply that I dont need to fill out the W9.

13

Again, you are interpreting the laws to your favor. There is no ‘per project’ concept here. By payments, they are talking ‘total’ payments.

If you answer the following two questions then this is simple:

  1. Are you working as an individual, a sole proprietor, a corporation, an LLC, or an employee? In other words, what is the name of the entity on the contract that you have with them and on the check that they send you?

  2. What is the TOTAL dollar amount that they’ve paid you in 2007 (no breakdowns)?

14

Sagewing is right in that payments mean over the course of a tax year and not per project. I’ve had several clients ask for the W-9 after small dollar projects add up to $600.

One thing though Sagewing, in your first post, I think you are confusing the W-2 form with the W-9. The W-2 is for employees. The W-9 is specific to outside contractors.

15

Actually, both employees and contractors submit a W9 TO the employer/client when they start working for them. At the end of the year, contractors get a 1099 and employees get a W2.

I’m literally sitting in front of a stack of W2’s and 1099’s right now, trying to get through tax season :frowning:

16

I didnt know they made it into an actual season now…have they replaced spring?

17

Haven’t you ever hear the term ‘tax season’? :slight_smile:

Ok, so what about your tax status? I’m curious… Are you an individual or a company?

18

When I was in charge of W-9s for the school district, we required them from everybody for the converse reason: many people–like the OP don’t understand when one is needed and when one isn’t. The safest way to deal with it is to require it from everyone and let the trained people in Accounting deal with figuring it out. We’ve had more than one “company” that turned out to be someone working out of their garage on alternate odd Thursdays. :slight_smile:

Most of the big companies had a pre-printed/pre-filled W-9 that they’d send.

Just a note: It’s also acceptable for a company to request an “alternate W-9” which can include requests for additional information about your business. This is common with governmental agencies who may want NIGP codes, HUB status, or other information to help them identify who you are and what services you offer. This information can be of great value to both parties when it comes to awarding contracts.

19

I’ve heard it, have you ever heard of ‘Spring’?

I am an individual, human, from the planet Earth, I like warm baths, the beach, a good book, and occasionally Ben and Jerry’s ice cream.

20

We’ve had more than one “company” that turned out to be someone working out of their garage on alternate odd Thursdays.

Whats the difference, as long as you are honest and you do good work?