How to Fill out a W9 Form as a Sole Proprietor or Single-Member LLC


One of the nice things about being self-employed is the flexibility you have. But with this newfound freedom, there is more paperwork. As a new business owner, your customers may ask you to fill out a W9 form.


You want to make sure that they report to the IRS the income they paid to your business. made under your business. You do not want it to look like they paid you as an individual if you have a separate entity set up. That's why it's important to make sure you fill this form out correctly.


Let's take a look at what the W9 form is for and how to properly fill it out as a sole proprietor or single-member LLC.


What is a W9 Form?

Individuals and entities use W9s to collect taxpayer information if the IRS requires them to file information returns. The individual or entity will request the W9 for you so they can keep it for their records. The information they will need is your tax identification number (TIN). This can be a social security number (SSN) or employer identification number (EIN).


As a sole proprietor or single-member LLC, they will issue you a 1099-NEC in January of the following year. This is if they paid you $600 or more. Other examples of information forms you may receive after filling out a 1099 are:

  • 1099-INT (interest earned or paid)

  • 1099-DIV (dividends, including those from stocks or mutual funds)

  • 1099-K - (merchant card and third-party network transactions)

  • 1099-C (canceled debt)

How do you fill out a W9 form?


#1 - Do not leave line 1 blank! Even if you have a doing business as (DBA) or single-member LLC. You will print your name as it appears on your personal income tax return.


#2 - If you do have a business name enter that on line number 2. If you do not have a separate business name leave this line blank.


#3 - Check the box that matches your federal tax classification. Since you are a single-member LLC you will select the first box. If you are not a single member-LLC please see page 3 of the W9 Form to see which box you should check.

Note: The IRS views a single-member LLC as a sole proprietor and taxes them the same at the Federal level. Unless you have made an election for the IRS to tax you as a different entity.

#4 - is for accounts maintained outside of the United States. If this isn't you leave it blank.

#5 - Fill out the address you would like to receive tax information at on lines 5 and 6. Line 7 and requester information is optional.


See the example below to see what this section looks like filled out.


#6 - In Part I you will want to fill in your tax identification number. If you do not want your 1099-NEC to have your SSN do not use your SSN. Leave that line blank. Put your EIN on the second line. See below for an example.


#7 - Last but not least, you will sign the W9 to certify that you are a U.S. citizen and that the information you filled out is true. Be mindful that you are filling this out under penalties of perjury. So tell the truth!

Failure to turn in this form can result in you being subject to backup withholding later. This means that you will not receive your total payment, and the IRS will require the customer to withhold taxes.


Now you're ready to turn in your W9.


For tips on how to avoid running into any tax trouble as a business owner follow the Tax Relief with Timalyn Bowens podcast. The first episodes you should listen to are:


Don't let taxes and back taxes get in the way of your focusing on your business, in order to grow and scale.

 

Timalyn S. Bowens EA is America's Favorite EA and Louisville's Tax Expert that will work hard to find a legal solution that is customized for you! As an Enrolled Agent licensed through the Internal Revenue Service Timalyn is able to fight the IRS for taxpayers in all 50 states.


When you are facing questions regarding your personal or business taxes, working with a professional makes all the difference. At Bowens Tax Solutions, we serve our Louisville-area neighbors by providing the tax services and knowledge needed to succeed. We are here to assist you with your tax issues and preventative care. Visit our website at www.bowenstaxsolutions.com for more information.

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