Carol,Hello! I wanted to check with you about a sentence that is in our Independent Contractor Agreement. No one has ever given us a W-9 before even though they have signed the agreement. Why are the contractors submitting any tax related information to us? I thought they were to complete all of that completely on their own. Is that part necessary? Can you please advise on this?Thank you so much!!!
Tanya is referring to a sample independent contractor agreement I include in my Money Management for Homeschool Organizations and Paying Workers in a Homeschool Organization ebooks. Both are available at my bookstore.
The W-9 is the official way to collect an Independent Contractor’s name and SSN or business name and EIN(Employer Identification Number). This information is needed if your pay them over $600 a year and issue them a 1099MISC.
It is also the unofficial way to determine if you are dealing with ethical people. Some people do not like giving their information on a W-9 because they were not going to report the income on their tax return. Having them fill in a W-9 indicates that your organization obeys the law and expects them to obey the law as well.
Carol Topp, CPA
Actually the parents with students in the class pay the independent contractors directly. It does not come from the co-op’s funds. Do I still need to keep track of how much they get as an annual total from the parents and work complete these forms? If so, we may need some additional guidance.