What is a W-9 form? 
The forms used to identify the type of person hired vary from employee to independent contractor.
When hired, employees are typically asked to complete a W-4 "Employee's Withholding Allowance Certificate" form. Though the main purpose of the W-4 form is to help the employee and employer calculate the number of tax withholdings, this form also gathers personal information, such as name, address, social security number, and marital status.
On the other hand, independent contractors are typically asked to complete a W-9 "Request for Taxpayer Identification Number and Certification" form when hired. As the employer is not responsible for withholding taxes from the professional, the W-9 does not calculate this information. Rather, it collects and verifies an independent contractor's taxpayer identification number (TIN), such as social security (SSN) or employer identification number (EIN).
If you elect to participate in Guru.com's 1099 tax service, all the independent contractors you hire must complete and submit a W-9 form to Guru.com (the agency issuing the 1099 form).
What does a W-9 tax form look like? View the form now.
What is a 1099-MISC form?
The 1099, a.k.a. the 1099-Miscellaneous Income Form or the 1099-MISC form, is the tax form sent to the IRS and independent contractors who have earned more than $600 the previous year. It is the freelance equivalent of the W-2 form, which is sent to direct employees. To receive a 1099 form, independent contractors must complete and submit a W-9 tax form to the issuing agency.
The issuing agency is typically the employer who hires the independent contractor to perform services. If you have elected to participate in Guru.com's 1099 service, then Guru.com is the issuing agency and responsible for collecting the W-9 information from the independent contractor and issuing the 1099 form to the IRS and the independent contractor.
1099 forms contain the following information:
- Freelancer's name and address
- Freelancer's taxpayer identification number (TIN)
- Payer's name, address, and telephone number
- Payer's employer identification number (EIN)
- Amount of non-employee compensation
The following criteria must be met to issue a 1099:
- A payment is made to someone who is not an employee (i.e. an independent contractor).
- The payment is for services, including payment for parts or materials used to perform the service.
- The payment was made to an individual or partnership.
- The payment(s) totalled more than $600 in a single, calendar year.
- The independent contractor has completed and submitted a W-9 form to the issuing agency (Guru.com or the employer if they have not elected to participate in Guru.com's 1099 program).
What does a 1099 tax form look like? View the form now.
Who receives a 1099-MISC form?
The 1099 tax form is issued to the IRS and independent contractor if the criteria above are met.
A 1099 tax form is not issued to the IRS and independent contractor if the following conditions exist:
- The independent contractor has not completed and submitted a W-9 form to the issuing agency (Guru.com or the employer if they have not elected to participate in Guru.com's 1099 program).
- The independent contractor has not earned more than $600 in a calendar year.
- The payment was made to a corporation.
- The payment was for something other than services, parts, or materials.
|