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In the W-9 form, should I check "Exempt payee" box?

San Jose, CA |

Hi,

I am starting a consulting job for next five months. The company wants me to sign W-9.

1) Is this normal for a consultant to sign W-9?
2) Should I check "Exempt payee" box? I am a normal US Person, who has never been under any IRS issues, so far.

Attorney Answers 4

Posted

The purpose of completing a W-9 is to allow the employer to determine your tax status with respect to withholding of taxes.

1. If you are an individual consultant the employer is requesting this as a routine procedure.

2. By checking the exempt payee box you are claiming that there is no tax withholding requirement as related to the employment. However, if the employer does not withholding any taxes then it will be your responsibility to pay your income and any payroll taxes in a timely manner (usually in quarterly installments).

See a good CPA or Atty. in your area for help preparing your tax return.

BW

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Posted

The W-9 form is used any time someone paying money for services needs to report it to the IRS. You will likely be issued a 1099 (instead of a W-2) so that you can accurately report your income on your taxes and the company that paid you can keep track of the amounts it paid for consulting services. So, yes, it is normal for a consultant to sign a W-9.

The instructions for the W-9 form explain what an exempt payee is. (See page 3 - http://www.irs.gov/pub/irs-pdf/fw9.pdf )

If you are an individual or sole proprietor, you are probably not an exempt payee.

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Posted

This is normal and your question indicates that you should hire a tax professional to help you plan and prepare your taxes. This is just a request for your tax I'd number so that the payor can prepare a 1099 for the payments they made to you.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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Posted

This is normal and your question indicates that you should hire a tax professional to help you plan and prepare your taxes. This is just a request for your tax I'd number so that the payor can prepare a 1099 for the payments they made to you.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

Mark as helpful

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