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W-9 and 1099 Forms: What Are They and Why Should I Care?

by Andy Johnson on December 21, 2018 in Freelance Success

In the United States, there are a couple of forms you should be aware of when doing business with clients who pay you over $600 during a given tax year:

W-9 Form: This is a form you're responsible to send to your client(s) to document your taxpayer ID number (which is either your social security number or employee ID number, depending on your business structure). You can download the W-9 form from the IRS.

1099-MISC Form: After your client has your W-9 form, they will send you a 1099-MISC form which documents the amount of money they've paid you during the given tax year. They will also send a copy of this form to the government. You don't need to do anything with your copy other than file it away for historical documentation.

The purpose of these forms from the government's perspective is to make sure the amount of money your clients say they paid you lines up with the amount of income you're reporting on your own tax return. So unless you like paying fines, you'll want to make sure your reported income matches up to these 1099-MISC forms the government is receiving from your clients.

If your reported income is greater than the total 1099-MISC amounts, that's probably because you've received income from clients that have paid you less than $600 (in which a 1099-MISC form wasn't necessary), or maybe a client has failed to fill out a form, in which case you should remind them.

Disclaimer: Harpoon and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

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