When non-employees perform work for you in your trade or business, it’s important to obtain a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, before paying them. Taxpayers use a Form W-9 to provide their correct TIN to the person who is required to file an information return with the IRS to report income paid to the taxpayer.

If you pay someone who is not your employee $600 or more, you are required to issue a Form 1099-MISC, Miscellaneous Income. You are not required to issue this form for payments made to a corporation. To accurately complete 1099-MISC, you’ll need to collect the information contained on the taxpayer’s W-9.

It’s best to obtain a W-9 before paying the individual. If you wait until after the fact, he or she might refuse to give you one, causing you to have to file an incomplete Form 1099-MISC to the IRS, which can result in you owing back-up withholding. If you plan to pay someone who is not an employee, you may want to consult our office to ensure that you are taking proper precautions.