Learn About Vendors And W9 Form With Limited Company Accountant!

If you are a business owner or a vendor you may be already aware of the W9 form. Business owners know the headache of handling all the important forms in the absence of their limited company accountant. Including the W9 form which is important, and every employee and vendor has to fill it out at the time of hiring.

What this form ensures is that the employee and vendors comply with the laws and regulations. To understand it let's dive deeper into the topic.

What is a W9 form?

The W9 form is the form that an employer/ client files with the IRS each year. This form is almost one page long and requires some of your information. You will be asked to fill out your name address or in some cases social security number along with your taxpayer identification number.

What is the purpose of this form? 

The main purpose behind this form is to create a document of the business relationship so that when you make an invoice you have the correct TIN.

Fancy learning more? Talk with a Birmingham Accountant!

Do you need a W9 form filed by your vendors?

 Yes, it is a must that you get the W9 form filled out by your employees, contractors, and vendors. In short, for every business relation where you are the payor, you must get this form done.

Even the vendors who don’t have to perform backup withholding need to fill out this form even if they only fill in their payee code and leave other fields blank. They have to do this to form a vendor relationship and to make it easy to file taxes.

Are there any exceptions to this rule? 

Yes, there is an exception when it comes to foreign vendors. They are not eligible to fill out the W9 form which is why they have to fill out the W-8 form instead.

Learn more about the exceptions from Birmingham Accountant.

Do you need to renew the W9 form?

Usually, you will be able to use the form from year to year but there are scenarios where you might need to get a new one. For example, in case the employee changes their last name.

The scenarios in the case of individual/ independent vendors vary a bit. In their case, there could be many reasons for getting a new W9 form for example- if they change their business address or if they go to some other company and get a new TIN.

Is there any reason why a vendor might need this information?

The only possible reason why a vendor might need such information from you is simple. They will need this information if you are buying or selling goods for them. Sometimes vendors ask for this information just for the sake of getting their employer’s identification. But if there is no use of such information you can refuse to give your personal information.

Want to learn more about the W9 form?

If you are curious to learn more about the process but don’t understand it even after reading the details thousands of times then you can talk with an expert. For example Accountants Birmingham.