Full W9 vs 1099 Guide
Confused about when to use a W9 or a 1099 form? You're not alone. Whether you're hiring contractors or managing your freelance work, understanding these forms is crucial for staying compliant and avoiding penalties.
Comparison Chart
| Feature | W9 | 1099 |
|---|---|---|
| Purpose | Collects taxpayer information | Reports payments to IRS |
| Completed By | Contractor/freelancer | Business paying the contractor |
| Used For | Requesting TIN/SSN and certification | Reporting income payments |
| Filed With IRS? | No | Yes |
When to Use Each Form
Use a W9when you need to collect information (like TIN or SSN) from someone you plan to pay.
Use a 1099when you have paid someone $600 or more and need to report that payment to the IRS.
Who Sends Each Form
Businesses send W9 requests to contractors.
Businesses send 1099 forms to contractors and to the IRS.
Common Mistakes to Avoid
Not requesting a W9 before making a payment.
Filing a 1099 without a complete W9 on file.
Missing deadlines for issuing 1099s (January 31).
Real-World Examples
A marketing agency hires a freelance designer: Collect a W9 first, issue a 1099 if total payments exceed $600.
A startup pays a consultant $5,000: Same process—W9 first, then 1099.
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