This continues our 10-part series of best practices for business owners.
Best Practice 9: Collect W9’s from vendors
A W-9 is an IRS form which a business owner uses to request a taxpayer identification number from an independent contractor or vendor that is not a corporation. A taxpayer identification number is needed for year end processing of form 1099-MISC, which businesses are required to file on services over $600 in a tax year. It is much simpler to provide vendors with this form to complete prior to paying them for services rather than scrambling at year end as 1099’s are being filed. It is important to note that form 1099-MISC may be filed for reasons other than non-employee compensation. Visitwww.irs.gov for additional information.