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If your business relies on contractors, then you’ll know all about the W-9 form.
This year’s tax season is fast approaching. The W-9 form is another document that surges in importance around this time. Normally, the deadline for last year’s taxes is April 15. Due to the ongoing COVID-19 pandemic, however, that is bound to be extended yet again. If your business relies on contractors, then you’ll know all about the W-9 form. However, it is also conceivable that your vendors and contractors will refuse to meet you halfway when it’s time to fill it out.
What Are Requests and Solicitations?
First things first, ask your vendor for the W-9 form itself. Document this request in writing, so there is verifiable proof that the process is in motion. Emailing the forms back and forth is both quick and easy. Besides, the IRS classifies this action as a “solicitation” and the first step involves building a relationship once you’ve started your business. After it gets off the ground, you must take the next step. What this means is that you’ll need to complete the “first annual solicitation” by December 31 of the year in which you affiliated. Meanwhile, January 31 is the deadline if you began your relationship that previous December. Don’t forget about the second annual solicitation, which you’ll need to address by the upcoming December 31 deadline.
How Do I Address Forgotten Forms?
Forgotten forms present another concern. Although this dilemma is understandable, it shouldn’t cause you to worry. Again, request for the W-9 to be filled out right now. Vendors and subcontractors will be pleased to do so. In any case, prepare the 1099-NEC form for your vendor.
Are There Any Harsh Penalties?
Every business owner is required to request Form W-9 from their partners. Each contractor and vendor that you’ve worked with needs to follow suit. That way, you can avoid any potential penalties; unfiled 1099s can result in fines of anywhere from $50 to $270 for each copy that is not filed on time. In these lean times, no small business can absorb that sort of fine or fee. Also, keep previously-collected forms secret, and keep them safe as well. Any leaked information can, in this regard, lead to civil suits and criminal proceedings.
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