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How To Fill Out Form W-9 For An LLC

Overview

How To Fill Out Form W-9 For An LLC

You probably made it here because a company you are working with requested a filled-out IRS Form W-9. 

You’re in luck because completing this form is quick and easy to do and we will show you how! We will answer what the W-9 form is, how it’s used, and how to correctly fill it out. 

What is a W-9 Form?

IRS Form W-9 is used by businesses to gather information from entities that provide over $600 worth of services or products to them. 

The IRS Form W-9 is provided by the Internal Revenue Service (IRS) and collects information such as the company’s name and contact information, type of entity, and Taxpayer Identification Number (TIN) for federal tax purposes.

What is IRS Form W-9 used for?

Whether a freelancer, independent contractor, or major corporation, a request to fill one of these out is very likely. 

So, since you were asked by a company that you want to want to start working for, you may be wondering why. 

This company is responsible for requesting the completed IRS Form W-9 as they use the provided information to report the payments they made to you to the IRS. At the end of the year, the paying company will issue a 1099-NEC or Nonemployee Compensation form (which was previously Form 1099-Misc) to the entities they paid. The entities that receive the 1099-NEC form will use this information to prepare their end-of-year taxes. 

Without a completed W-9, the paying business can withhold 28 percent of the money paid to your LLC, which is sent to the IRS.

How do I fill out a W-9 for my LLC?

IRS Form W-9 template

After downloading IRS Form W-9 from the IRS website, there are 8 steps to filling out to fill out the form. Let’s break each of these down.

Step 1: Provide the LLC’s name

Enter the legal name of your LLC. This should be the name you use on the tax return. If you haven’t filed a tax return yet, use the name that was registered with the state when you filed the LLC and/or the Employer Identification Number (EIN) if you have one, it’s important to use the name exactly as it is registered as even a slight change such as LLC vs L.L.C can cause troubles at tax time. 

Step 2: Provide the business name/disregarded entity name if different from the business name

This isn’t super common, but would be used if the LLC files taxes under the owner’s name and also uses a  Doing Business As (DBA) or trade name.

Step 3: Enter the LLC’s Federal tax classification

An LLC has multiple ways to be taxed. Common choices for the LLC are:
– Single-member LLC
– C Corporation
– S Corporation
– Partnership

If you are a single-member Limited Liability Company, the LLC is taxed by default as a sole proprietorship and would check the first box on the first line. 
If you have an LLC with multiple members, it would be taxed as a partnership by default and would check the Limited Liability Company box on the second line and enter “P”.

An LLC that is taxed as a C Corporation or S Corporation would have had to file additional paperwork with the IRS. If your LLC elected to be taxed as a C Corp or S Corp, check the Limited Liability Company box on the second line and enter the appropriate “C” or “S”. 

Step 4: List any exemptions and FACTA reporting

Backup withholding is when the company paying you would automatically take money out of your income and directly pay the IRS. 

This section won’t typically be required of an LLC.

Reasons an LLC would enter a payee code include:
1 – An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).
2 – The United States or any of its agencies or instrumentalities.
3 – A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities. 
4 – A foreign government or any of its political subdivisions, agencies, or instrumentalities.
5 – A corporation.
6 – A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession.
7 – A futures commission merchant registered with the Commodity Futures Trading Commission.
8 – A real estate investment trust. 
9 – An entity registered at all times during the tax year under the Investment Company Act of 1940.
10 – A common trust fund operated by a bank under section 584(a).
11 – A financial institution.
12 – A middleman known in the investment community as a nominee or custodian.
13 – A trust exempt from tax under section 664 or described in section 4947.

Payees that are exempt from reporting under the Foreign Account Tax Compliance Act (FATCA) may enter a code in the “Exemption from FATCA reporting code” box. 

This section won’t typically be required of an LLC.

Reasons an LLC would enter a FACTA reporting code include:
A – An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37).
B – The United States or any of its agencies or instrumentalities.
C – A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities.
D – A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i).
E – A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i).
F – A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state.
G – A real estate investment trust.
H – A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940.
I – A common trust fund as defined in section 584(a).
J – A bank as defined in section 581.
K – A broker.
L – A trust exempt from tax under section 664 or described in section 4947(a)(1).
M -A tax-exempt trust under a section 403(b) plan or section 457(g) plan.

Step 5: Enter your address

Enter the street address, city, state, and zip code where the LLC’s tax information should be sent. This is where the paying company will send the 1099-NEC form, which is used to file your tax return. This should be the same address as is on the tax return as the IRS will match these addresses to 1099 and tax return.

Step 6: Include a requester’s name and address (Optional)

This is an optional step. Sometimes a bank will have their information there and will get a copy of the form. 

Step 7: Enter the LLC’s Taxpayer Identification Number (TIN)

In this section, you will enter the LLC’s tax number which will either be the owner’s social security number or Employer Identification Number (EIN). 

A single-member LLC with no employees has the option of using the owner’s SSN, but if the LLC has multiple members or has elected to be taxed as a C Corporation or S Corporation, it would use an EIN. 

Need an EIN? Learn how to apply for an EIN

Step 8: Sign and date

Read over the certification and then sign and date IRS Form W-9. 

That’s it! 

Once you are done filling out the completed Form W-9, it is ready to send to the entity requesting it. 

You can also keep a copy of this document, so if others request it, you will have one handy.

If there are questions that haven’t been answered in this article, you can learn more on the Form W-9 instructions

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