Why Do I Need To Submit A W9 Form

Why Do I Need To Submit A W9 Form – Failing to submit a w9 form when requested can result in significant financial and administrative repercussions for both payers and payees. When a business pays more than $600 to a single taxpayer during the year, it must submit an informational return to the internal revenue (irs) to disclose the payments. Without a correct tin, the payer must withhold 24% of the payment and remit it to the irs. The form requires an individual to provide their name, address, tax qualification, and withholding requirements.

For the payee, one immediate consequence is backup withholding. A vendor should submit a new w9 to the payer when their legal business form changes. This form serves as a guideline and gives the employer the information needed to fill out a form 1099 at the end of the year. Note that the vendor files a w9 form with the payer before the total amount paid in a calendar year is known.