If you work as a freelancer in the US then the chances are that you are going to need to submit a Form W-9. While this form will be used for tax purposes you don’t actually use it to pay taxes. This only form applies to people who actually work in the States as a freelancer — those outside the US will generally need to send a W-8.
What is a Form W-9?
The Form W-9 is issued by the Internal Revenue Service of the United States. The Form W-9 is not sent directly by the individual to the Internal Revenue Service but instead is given to their employer. It requires the freelancer to provide a few details about their personal circumstances including an address, and a tax payer identification number. The form can be obtained online and once it is filled out and returned it allows the employer to keep their records in good order.
Any business that collects the Form W-9 does not send these directly onto the Internal Revenue Service. Instead they use the information provided on them to produce a different document called the Form 1099. This document will contain all the earnings of the individual freelancers who have worked for the business in the last year. As well as sending Form 1099 onto the Internal Revenue Service they will usually also send a copy to the freelancer as well.
The company that employs the freelancer does not pay their tax for them, but the information supplied on the Form 1099 will allow the individual to pay the amount they owe when they file their tax returns. It is important to keep in mind that as an independent contractor you are fully responsible for paying your own tax, and supplying the Form W-9 does not change this in any way.
In a lot of cases a freelancer based outside the US will submit a W-8, but not always. It may be that they supply a W-9 which the American based firm can then treat as if it was sent by a locally based freelancer. If this is the case then the W-9 will only be used as a means to keep information about the freelancer.
How to Complete a Form W-9
Filling out the form W-9 is fairly straightforward so long as you have your taxpayer identification number. It isn’t a long document but it is important that you fill it out correctly. It comes with an explanation of all the questions and it is important that you read the instructions carefully. A lot of people initially fill these simple forms out wrong and it means that they have to resubmit it again — a real waste of time. By submitting the W-9 you are claiming that the taxpayer identification number is correct; expect consequences if this turns out to be not the case. You can either get this document directly from the person who is employing you or you can just download the form yourself directly from the Inland Revenue Service website.
