Tax Day is approaching, and soon it will be time to begin assembling forms. If you haven’t looked at them yet, all those numbers and letters – W-2, W-9, 1099 – can easily overwhelm you.
Some forms are pre-populated and designed for you to pass on to the IRS. They may be headed to your mailbox, or sitting in a “tax documents” portal on a website, awaiting download. In theory, there may be nothing you need to do, apart from delivering them to your tax preparer, if you have one, or documenting appropriate sums on your tax return. Other forms will require action on your part.
Here is a rundown.
What is a W-9 used for?
A W-9 is typically used by businesses to collect a person’s identifying information, including name, address and Social Security number or tax identification number, for income purposes.
A typical reason for filling out a W-9 is that you’re an independent contractor, freelancer, or gig worker. You may also be asked to fill out a W-9 when you open an interest-bearing bank account or another financial account that delivers extra income.
This form doesn’t go to the IRS. But the information you provide on a W-9 will be used to prepare and populate other forms: Read on.
Is a W-9 the same as a 1099?
The main difference between a W-9 and a 1099 is that you fill out a W-9, while the business or entity that is paying you fills out the 1099. In most cases, you should receive any 1099 form by the end of January.
A 1099 form is used to report income that isn’t directly earned through an employer. Because there are many different ways to make money outside of a traditional job, there are several types of 1099 forms.
Common 1099s you might see: 1099-G, 1099-K, 1099-R, 1099-Div
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Need help with your business or personal taxes? Contact KM&M
If you need help with your taxes — business or personal — please contact the experts at KM&M. Reach us by phone at 419-756-3211, email to [email protected], or by filling out the contact form on this website here.