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As an individual or single-member LLC, this will usually be your Social Security Number. It can also include your employer identification number if you are a multi-member LLC classified as a partnership, C Corporation or S Corporation. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.

• There are many types of forms to complete as a business owner.
• New W-4 forms should be submitted whenever the employee’s personal or financial situation changes, as this can impact their income tax calculations.
• IRS Form W-8BEN is used to certify that a contracted person is a foreign individual is a non-US resident and performs work outside of the United States.
• Employers should also be aware that a Form W-8BEN-E is a slightly different variation that is used when contracting with a foreign entity rather than a foreign individual.
• The instructions for completing these forms have also been updated.
• Steps 2, 3, and 4 are optional, but completing them will ensure that your tax withholding will more accurately match your tax liability.

If you’re working with a tax software or professional, the IRS recommends you make your payments via Electronic Funds Withdrawal . With this option, you can e-file and authorize payment in one step. As we mentioned above, every employer who is required to file one or more Form W-2 must use Form W-3 to do so. Form W-3 acts as a cover sheet, or summary, compiling the information from all of your W-2s onto one sheet. By now, you’re probably asking yourself whether or not you need to file and send out W-2 forms. The short answer is, if you have at least one employee who earned $600 or more during the calendar year, you need to submit Form W-2 (and Form W-3, for that matter). In the past, allowances were tied to the amount of personal exemptions.

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Making sure that Form W-9 is completed accurately can save a lot of trouble come tax time. Use Line 7 if you need to supply the person or business paying you with account information such as a bank or brokerage account that pertains to the request for the W-9. Certain businesses and organizations are exempt from backup withholding in certain instances and will need to fill out this line. Should any of these apply to your situation, you’ll need to provide a number or letter code from the instructions representing the reasons behind making this declaration. In most cases, corporations and businesses will be exempt from backup withholding. As an independent contractor, vendor, freelancer or other individual receiving nonemployee compensation, you typically do not work for the person or business as an employee. If you don’t work as an employee, you’ll typically have your earnings reported on a Form 1099-NEC and will need to prepare a W-9.

Filing W-2s online using Business Services online is free, fast, and secure! Our checklist offers information and tools to help you get started whether you are a new or returning Business Services Online user. Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.

Related Forms

Copy B – To be sent to the employee and filed by the employee with the employee’s federal income tax returns. Since the IRS receives a copy of the W-2 from the employer, if the amount reported on the W-2 does not match the amount reported on Form 1040, the IRS may get suspicious. In addition, if an individual does not pay the required amount of taxes, the IRS will also know this. In this way, the IRS uses Form W-2 as a way to track an employee’s tax liability, and the form has come to be seen as a formal proof of income. The Social Security Administration, court proceedings, and applications for federal financial aid for college may all use Form W-2 as proof of income. Not only does it help tax authorities keep track of income and taxes paid and owed, it also helps employees to fill out their own tax returns with the correct information.

Of course, it’s best to adjust documentation to the new rules as soon as possible.

About Form W-4, Employee’s Withholding Certificate

When beginning to work as either an independent contractor or an employee, you should expect to fill out some paperwork providing your personal identifiable information. Form W-9 is an Internal Revenue Service form which is https://turbo-tax.org/ used to confirm a person’s taxpayer identification number . A 1099-INT is the tax form used to report interest income to investors and the IRS. Trade or business of a foreign corporation and meets qualified resident status.

If you tick “Yes”, you will need to complete Part III. If you tick “No”, you can skip Part III. IRS Form W-8BEN is used to certify that a contracted person is a foreign individual is a non-US resident and performs work outside of the United States. Use to determine your tax withholding allocations if you work in NYS, NYC, or Yonkers but are not a resident of NYS. ▶ Information About Form W-8BEN and its separate instructions is at/formw8ben. The form must be signed and dated by the beneficial owner of the account.