For people that are independent contractors, as well as for people that work for themselves, a W9 Form is needed to report their Social Security Number or Business Tax Identification Number to their clients. This is a pretty cut and dry scrap of paper when it comes to government forms. You may just need to provide your name, your address, as well as your Social Security Number (or your Employer Identification Number, for those who are contractors and are so considered a new business entity all of their own).

Besides the above information, an IRS W9 Form will also ask whether you are subject to backup withholding. What is “backup withholding,” you may ask. Well, that's withholding at a flat rate of 28 % on payments made to you or your business under certain circumstances. There are a couple of common reasons for using backup withholding. One reason is if your name and Social Security Number doesn't match the name and Social Security Number that the IRS has on file for you. A different reason would be if you have outstanding tax debt. In this example the IRS would have told you that you are subject to compulsory backup withholding until the outstanding tax debt is totally paid for.

During the tax season of the year, contractors will be getting W9 forms to finish. Since in that time of the year, clients are getting ready to send out their 1099 forms. The 1099 Form is used to report self-employment earnings.

Other places you could be getting a W9 from are brokers and monetary establishments. They'd ask for a W9 if you'll earn interest earnings, dividends, or trading stocks and other instruments. As well as the usual places a few of the people may receive requests for the W9 form from more unusual places such as landlords and other people or businesses. This is exploited to ask, officially, from an individual or business their name, address, and taxpayer identification number in order for the asking for party to properly issue tax documents to the IRS.

As a rule, any kind of business that requests a W9 Form is one that pays you interest, generally, the types of firms that request Form W-9 is any business that pays you reportable income. However if you should happen to feel that you have received this form from a weird source you need to ask them why they are asking for the form and what they'll be using it for.

What about foreign subcontractors? With foreign contractors A W9 isn't needed, it's just needed to gather info from US folks and companies. However if you've got a foreign contractor that is working for you, they will most probably be required to fill out one of the varied W8 Forms.