How to Fill Out a W-9: A Step-by-Step Guide for Business Owners

Running a small business means wearing many hats—including tax paperwork expert. The W-9 form is one you'll encounter regularly when working with clients, contractors, or financial institutions. 

While it might look intimidating at first glance, completing a W-9 is straightforward once you understand what's required.

This guide breaks down the process into simple steps so you can fill out your W-9 form correctly every time, avoid common mistakes, and keep your business running smoothly.

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When is a W-9 form required?

You'll need to complete a W-9 form in several common business situations. Examples include:

• For independent contractors and freelancers:
  
  • When you begin work with a new client
  • When companies hire you for contract work or consulting
• For business-to-business payments:
  
  • When your business provides services to another business
  • When you're a vendor or supplier to other businesses
• For financial transactions:
  
  • When opening a business bank account
  • When working with payment processors like PayPal or Square
  • When you receive royalty, dividend, or rental income
• For tax compliance:
  
  • When any business needs to prepare 1099 forms for payments to you
  • When you're paid $600 or more during a tax year by a single client

Remember that the W-9 isn't sent to the IRS—it's provided to the specific requestor who needs your information for their tax reporting. These requestors include:

• Clients who hire you as a contractor.
• Companies that pay you non-employee compensation.
• Financial institutions where you have accounts.
• Property management companies.
• Investment firms.
• Payment platforms and processors.
• Grant-issuing organizations.

These entities use your W-9 information to prepare various 1099 tax documents they must file with the IRS and provide to you for your tax return. 

If you're using Homebase for your business, we can help with this process. 

As a reporting agent, Homebase files numerous federal, state, and local tax forms on behalf of your company, including Forms 1099 & 1096 for non-employee compensation. We make copies of all filed forms available in your Homebase account for easy access and record-keeping.

How to fill out a W-9 form: Step-by-step instructions

Let's walk through each section of the form to ensure you complete it correctly.

Step 1: Download the official W-9 form.

Start by getting the current version of Form W-9 directly from the IRS website. Always use the official form to ensure you're working with the most up-to-date version. The form is typically one page with instructions attached.

Step 2: Enter your name (Line 1) and your business name (Line 2, if applicable).

On Line 1, enter your name exactly as it appears on your tax return. For sole proprietors or single-member LLCs, this is your personal name, not your business name.

If you operate your business under a name different from your personal name (sometimes called a "doing business as" or DBA name), enter it on Line 2. If you're a sole proprietor without a separate business name, you can leave this line blank.

Step 3: Select your federal tax classification (Lines 3a and 3b).

Under 3a, check the appropriate box for your federal tax classification. Your options include:

• Individual/Sole proprietor: Select if you're a sole proprietor (single owner business) or a single-member LLC (limited liability company) that hasn't elected to be taxed as a corporation. A single-member LLC is considered a disregarded entity for tax purposes, and the U.S. owner is responsible for providing the necessary forms.
• C Corporation: Select if your business is incorporated and taxed as a standard corporation with double taxation (corporate and personal).
• S Corporation: Select if your business is incorporated but has elected pass-through taxation where profits flow directly to shareholders.
• Partnership: Select if your business has multiple owners and isn't incorporated or an LLC.
• Trust/estate: Select if you're completing the form for a trust or an estate.
• LLC: Select if you have a multi-member LLC and enter the appropriate tax classification code:
  
  • "C" if taxed as a C corporation
  • "S" if taxed as an S corporation
  • "P" if taxed as a partnership

Note: If you have a single-member LLC, check the "Individual/sole proprietor or single-member LLC" box instead of the "Limited liability company" box.

Now for section 3b—this applies only in specific circumstances. You must check this box if you're (1) classified as a Partnership, Trust/estate, or an LLC taxed as a Partnership AND (2) providing this form to a partnership, trust, or estate where you have ownership interest. 

Additionally, you must have foreign partners, owners, or beneficiaries. Checking this box alerts the recipient that they may need to file additional international tax information on Schedules K-2 and K-3 (part of Form 1065, Schedule K-1), which report relevant international tax information to partners and beneficiaries.

Step 4: Exemptions (Line 4, if applicable).

Most small businesses can skip this section. It's primarily for entities that are exempt from backup withholding or Foreign Account Tax Compliance Act (FATCA) reporting. If you're unsure whether exemptions apply to you, consult with a tax professional.

Step 5: Enter your address (Lines 5 & 6).

Enter your business address on Line 5. This should be the address where you receive tax documents. Line 6 is for your city, state, and ZIP code.

Step 6: Enter your Taxpayer Identification Number (TIN) (Part I).

Enter your Taxpayer Identification Number (TIN) in Part I. This will be either:

• Your Social Security Number (SSN) if you're a sole proprietor
• Your Employer Identification Number (EIN) if you have one

The TIN is used for federal income tax reporting and withholding purposes.

Enter only one number. If you're a sole proprietor with both an SSN and an EIN, the IRS generally prefers you use your SSN on the W-9 unless you're filing employment or excise taxes.

Step 7: Sign and date the form (Part II).

Sign and date the form in Part II. Your signature certifies that:

• The TIN you provided is correct.
• You're not subject to backup withholding.
• You're a U.S. citizen or resident alien.

Without your signature, the form is not valid.

W-9 form example: Filled-out template

Here's an example of a properly completed W-9 form for a fictional sole proprietor:

• Line 1: Jane Smith 
• Line 2: Jane's Web Design 
• Line 3: ✓ Individual/sole proprietor
• Line 4: (left blank) 
• Line 5: 123 Main Street 
• Line 6: Anytown, CA 90210 
• Part I (TIN): 123-45-6789 (SSN format) 
• Part II: Signature: Jane Smith / Date: 03/10/2025

For an LLC taxed as an S-Corporation, it would look like:

• Line 1: Jane Smith 
• Line 2: Smith Web Design, LLC 
• Line 3: ✓ Limited liability company and enter "S" for the tax classification Line 4: (left blank) 
• Line 5: 123 Main Street 
• Line 6: Anytown, CA 90210 
• Part I (TIN): 12-3456789 (EIN format) 
• Part II: Signature: Jane Smith / Date: 03/10/2025

How businesses use a completed W-9

Once you submit your W-9, the business that requested it will:

• Keep your W-9 on file for at least four years (required by IRS regulations). They don't send it to the IRS—it stays in their records as documentation.
• Use your information to complete any required tax forms, such as:
  
  • Form 1099-NEC for reporting payments to independent contractors.
  • Form 1099-MISC for certain other types of payments, including miscellaneous income to contractors, freelancers, and vendors.
  • Form 1099-DIV for dividend payments.
  • Form 1099-INT for interest payments.

These forms report your earnings to the IRS, which is why providing accurate information on your W-9 is crucial. Incorrect information can trigger problems for both you and the business paying you—including potential penalties from the IRS.

Common mistakes to avoid when filling out a W-9

Even small errors on your W-9 can cause significant headaches later. Here are the most common mistakes business owners make when completing this form and how you can avoid them:

Using the wrong tax classification

Selecting the incorrect business entity type can cause tax reporting problems. Make sure you understand your business structure and select the appropriate classification.

Providing an incorrect TIN (Taxpayer Identification Number)

Double-check your TIN before submitting. An incorrect TIN can trigger backup withholding (where the payer withholds a percentage of your payments for tax purposes) and cause mismatches in IRS records, which can affect the withholding of income taxes.

Forgetting to sign the form

A W-9 without a signature is invalid. Always sign and date the form before submitting it.

Sending the form to the IRS

The W-9 stays between you and the business requesting it. The IRS doesn't want or need your W-9 form. Sending it there just creates confusion and doesn't fulfill your reporting obligation to the requesting business.

How to submit a W-9 form securely

Your W-9 contains your Social Security Number or EIN—essentially the keys to your financial kingdom. Protect it like you would your bank account information.

Digital delivery options:

• Secure portals: Many companies now use encrypted systems specifically designed for sensitive document exchange. These are typically the safest option.
• Password-protected files: If emailing your W-9, save it as a PDF with password protection, then send the password separately via text message or phone call.
• Electronic signature services: Platforms like DocuSign or Adobe Sign offer secure ways to complete and transmit W-9s with encryption and identity verification.
• Encrypted email: Services with end-to-end encryption provide better protection than standard email.

Physical delivery options:

• Hand delivery: Still the gold standard for security if practical.
• USPS mail: If using postal mail, consider sending via certified mail so you can track delivery.

When handling your W-9, remember that security breaches often happen through everyday oversights. Never email an unprotected W-9 as a regular attachment or send it via text message. 

Avoid using public Wi-Fi when transmitting any tax documents, as these networks are particularly vulnerable to interception. Be mindful of physical documents too—don't leave completed W-9s sitting in shared printers or fax machines where others might see or take them.

Once you've sent your W-9, take one final step to protect yourself. Ask the recipient to confirm they've received your form and inquire about their document retention policies. 

Any reputable business requesting your W-9 should have clear procedures for securing sensitive tax information. Don't hesitate to ask questions about how they protect your data—a professional organization will appreciate your diligence rather than being offended by it.

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FAQs about filling out a W-9

What is the purpose of the W-9 form?

The W-9 form allows businesses to collect the information they need to report payments made to you to the IRS. It's an information collection form, not a payment or tax form itself.

What happens if I don’t fill out a W-9?

If you refuse to provide a W-9 when legally required, the business requesting it may have to withhold 24% of your payments (backup withholding) and send that money to the IRS. Additionally, you might lose business opportunities if clients can't properly document payments to you.

Can I use an employer identification number (EIN) instead of an SSN?

Yes, if you have an EIN (Employer Identification Number), you can use it instead of your SSN on your W-9. Many business owners prefer this for privacy reasons. However, sole proprietors should be consistent with the tax ID they use on tax returns. 

Who should sign the W-9?

The W-9 should be signed by the person whose SSN is listed on the form or by an authorized representative of the entity whose EIN is listed. For sole proprietorships, that's the owner. For corporations, partnerships, or LLCs, it should be someone authorized to sign on behalf of the business.

How often do I need to update a W-9?

You should provide an updated W-9 when:

• Your information changes (name, address, TIN, etc.).
• Your tax classification changes.
• A business relationship restarts after being dormant.
• A client requests a new one.

Many businesses ask contractors to submit a new W-9 annually as a best practice. 

What if I accidentally provide the wrong TIN?

If you discover you've provided an incorrect TIN, immediately submit a new, corrected W-9 to anyone who received the incorrect form. If tax forms have already been filed with the incorrect information, you may need to work with the payer to submit corrected forms to the IRS.

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