How to Fill Out Your W-9 Form

Managing a business requires a lot of paperwork, and tax forms are not always the most user-friendly. Most brokers and shippers require that carriers provide a completed W-9 form before they can begin working with you. Any inaccuracies in the W-9 form can prevent prevent carriers from completing setup with a broker or shipper or delay payments.

Though the IRS offers detailed instructions for W-9 completion, it can be a complicated process. Here's what you need to know to fill out your W-9 correctly, including line-by-line guidance and common confusions.

Note: The purpose of this article is to share information. As always, be sure to consult with a tax professional regarding your individual situation.

W-9 Basics: What is a W-9?

The W-9 form is the IRS's Request for Taxpayer Identification Number (TIN) and Certification. It is a formal method of sharing the details necessary to report income to the IRS on form 1099 at year-end when there is no employer/employee relationship (employees use a different form).

There are several reasons someone might receive income without being an employee, such as freelancers or contractors who work with multiple customers. The most common situation - and the one you are most likely to experience - is receiving income through work you do as a carrier.

By providing an accurate W-9 form, you ensure that the individual or business paying you reports the income to the IRS correctly. The information is also reflected on the 1099-NEC (formerly 1099-MISC) you receive so you can file your own returns. More importantly, it is your agreement that you will manage your tax liability on your own.

Outside of taxes, the W-9 form is a necessary component of the carrier packet for broker setups.

It's important to note that no taxes will be withheld from the amount paid to you.

Note: If you received less than $600 in income from a particular source, you might not receive a 1099 form. Generally speaking, you must still report that income when you file your tax returns, but there is a provision "stating that Form 1099 need not be issued for income from freight services." This means that although trucking businesses do not need to issue Form 1099s to owner-operators leased onto their authority. However, the practice generally remains intact.

How To Complete a W-9 Form

The good news is that W-9 Forms are short. The bad news is that they can be confusing, especially when you are an Owner-Operator. This step-by-step guide will get you through from start to finish.

Line 1: Name

Sole proprietors and single-member LLCs: This is your full name as listed on your current social security card. If you have changed your name without updating your social security card, enter your first name, the last name on your social security card, and your new last name.
Note: If you are a sole proprietor or a single-member LLC, the name of your business goes on Line 2.

Partnerships, multiple-member LLCs, C-Corporations, and S-Corporations: Enter the business name on Line 1 precisely as shown on your tax return. If you use another name for your business, you can add that on Line 2.

Line 2: Business Name

Sole proprietors and single-member LLCs - Enter the name of your business on Line 2.

Partnerships, multiple-member LLCs, C-Corporations, and S-Corporations - You only have to enter the business name if it differs from Line 1.

Line 3: Federal Tax Classification

All you have to do here is check a box and ensure you only check one box. Choose the box that corresponds with your current business structure.

Sole proprietors and single-member LLCs - Check the box for individual/sole proprietor or single-member LLC.
LLCs with multiple members - Check the limited liability company box, then note your organization under the LLC (e.g., partnership, C-corporation, or S-corporation).
Partnership - Check the partnership box.
Corporation - Check the corporation box.

Line 4: Exemptions

Individuals and sole proprietors who file taxes under their social security number do not have to worry about backup withholding. You can leave this section blank.

In some situations, businesses are subject to backup withholding. That means whoever is paying you must withhold 24 percent of the income and send it to the IRS directly.

You can generally avoid backup withholding as long as you provide an accurate Tax Identification Number and report all of your income each time you file your taxes. If you make an error with either of these, you will receive a notification from the IRS that you are subject to backup withholding.

If you have concerns about backup withholding, speak with your accountant or tax advisor for more information.

Line 5: Address

This is an easy one. Simply enter the street address of your business. If you use your home address for business correspondence, then your home address goes on this line. If you use a post office box, you can enter it here.

Line 6: City, State, and ZIP Code

Add the city, state, and ZIP code to complete your mailing address.

Line 7: Account Number

In most cases, you can leave the account number blank. However, if you and the business paying you use an account number for tracking, enter it here.

Part I: Taxpayer Identification Number (TIN)

Sole proprietors and single-member LLCs: This is your social security number as listed on your tax returns for the person named in Line 1.
Partnerships, multiple-member LLCs, C-Corporations, and S-Corporations: Use the Employer Identification Number (EIN) that corresponds to your business name on Line 1.

Part II: Certification

Double-check all of the information you entered carefully. If it is accurate, go ahead and sign and date in Part II. You finished!

Two Common Confusions with form W-9

Confusion #1 - EIN or SSN?

The primary and most common confusion we see when filling out Form W-9 is whether to use an EIN or SSN for a single-member LLC that has an EIN.

Per the IRS: "For federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner's social security number (SSN) or employer identification number (EIN) for all information returns and reporting related to income tax."

The single-member LLC may still need an EIN for other purposes, such as if there is excise tax or the LLC has employees. There may also be state requirements that differ from federal requirements.

This leads to another question: How do I know if my single-member LLC is considered a "disregarded entity"?

As the name implies, it means that the IRS will disregard the single-member LLC for federal income taxes since the income is reported on the owner's personal income tax return.

A single-member LLC is considered a disregarded entity unless it files form 8832 and elects to be classified differently for federal taxes, such as being treated as a c-corporation or s-corporation.

Confusion #2 - why did I not receive a 1099-MISC/NEC?

This leads to common confusion #2, why did I not receive a 1099-MISC/NEC?

If a single-member LLC has elected to be treated as a c-corporation or s-corporation for federal tax purposes, then the LLC will not receive a 1099-MISC/NEC. This is because 1099-MISC/NECs are not issued to corporations, including LLCs which have been elected to be taxed as c-corporations and s-corporations.

Therefore, when filling out form W-9, ensure you've selected the correct box in Line 3!

The IRS requires that businesses send out form 1099-MISC/NEC by January 31st for the prior tax year. If you're expecting to receive a form 1099-MISC/NEC, it's generally a good practice to inquire about the timelines and process of receiving the form ahead of time.

Final Notes on W-9 Forms

Incorrect W-9 Forms can lead to rejections by brokers and shippers you are trying to do business with, as well as issues with your 1099-MISC/NEC. That, in turn, will cause problems when you file your taxes. If you don't catch the issue immediately, you may be responsible for completing an amended return - which means paying your accountant all over again.

Even if you know you have a W-9 on file with a particular company, make sure it is still up-to-date. You must complete a new W-9 Form anytime your details change - including your name, business name, address, tax identification number, or tax classification election with the IRS.

Finally, as with any sensitive personal data, handle your W-9 Form with care. Don't complete forms unless there is a legitimate business need, and ensure you send them securely so they don't fall into the wrong hands.

Have additional questions on the W-9 form or other tax requirements? Share them here in the comments or reach out to us directly.