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 our 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?
Thank you so much!!!
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 you pay them over $600 a year and issue them a 1099-MISC.
You can get the Form W-9 from the IRS website.
The W-9 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.
Your organization keeps a copy of the W-9 filled in by the Independent Contractor. You do not sent it into the IRS.
Have more questions about paying workers in your homeschool organization? My book Paying Workers in a Homeschool Organization is being updated and expanded and will be available in print and ebook form later in 2016. Sign up for my email list to get notice of when its ready!
Carol Topp, CPA