![]() ![]() In this case, we're talking about Form 1099-NEC - Nonemployee Compensation. There are several Form 1099 variations, used to report different types of income. Important: If a business is working with a foreign independent contractor (living outside of the US), they need to issue a Form W-8BEN or W-8BEN-E instead. Keep in mind that you don't need Form W-4, as it only applies to the employees. It is valid until the contractor’s business information changes, at which point the contractor should inform their client and request to fill out the Form W-9 again. This tax form is filled out only once, at the beginning of the cooperation between the contractor and their client. The purpose of the Form W-9 is to identify the contractor and help business owners hiring them to handle taxes more easily. The contractor fills out this tax form with their business information, such as the business name, address, and tax identification number. ![]() Both tax forms come with explanations of what you should include, so make sure you read the instructions carefully and request professional help from a tax expert if needed.įorm W-9, Request for Taxpayer Identification Number and Certification, is an IRS form that is sent by the client (or a financial institution) to the independent contractor based in the United States with whom they plan to work with, in order to collect information needed for tax slips. If you get confused, keep in touch with the other party responsible for filling out the forms, and don’t be afraid to ask for clarification. They need to fill out special tax documents and forms in order to report their income and calculate their own taxes. Unlike full-time employees, a self-employed person or a freelancer doesn't have tax withholding applied to their paychecks. Whether you are working with an independent contractor, or are a contract worker yourself, it is important to know which tax forms you need and how to properly file or collect them. After that, the business hiring and paying independent contractors (more than $600 within a tax year) will use this information when reporting on a Form 1099-NEC (formerly reported in Box 7 of the 1099-MISC, Miscellaneous Income). ![]() However, there is a big difference between Form W-9 and Form 1099: Form W-9 is filled by the independent contractor to provide information to the business they're providing the service for. Both W-s are types of information returns the IRS requires to collect information about the contractor working for a business for tax reporting purposes. ![]()
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