How to request a W-9 from a vendor

When it comes to navigating the complex world of tax compliance as a business owner, one key document you'll need to be familiar with is the IRS form W9. Requesting a W-9 from your vendors ensures that you have the necessary information to file 1099 tax forms accurately and comply with IRS regulations.

This blog post discusses the importance of W-9s, when you need to ask for them, and how to efficiently request them from vendors. It also explores the benefits of leveraging automation tools like BILL to streamline the process of collecting W-9s, paying W-9 vendors, and organizing key vendor information.

Do businesses need a W-9 from all vendors?

In general, businesses are required to obtain a W-9 form from any service vendor they pay $600 or more to in a calendar year. This includes independent contractors, freelancers, and other vendors who provide services to the business.

When do I need to ask vendors for a W-9?

Before you start working with a vendor or independent contractor, it's best to request a W-9 from them. Form W-9 collects business contact information and other income tax info such as the business name, address, business type, federal tax classification, and the correct taxpayer identification number (TIN), which is needed for filing 1099 tax forms.

When don't I ask vendors for a W-9?

You may not need to ask for a W-9 from certain vendors, such as corporations or tax-exempt organizations, where filing a 1099 is not required for income taxes. As a general rule, if you need to file an information return for a vendor with the IRS (like a 1099-MISC), you should request a W-9 at the very beginning of the vendor relationship.

How to request W-9s from vendors

1. Send a copy of Form W-9 to the vendor: Make it easy for vendors and independent contractors to fill out the W-9 by providing them with a copy of the form. The IRS website has the most up-to-date version of Form W-9 for download.
2. Explain why you're asking for a W-9: Transparency is important when requesting sensitive information like a Social Security number (SSN) or employer identification number (EIN). Clearly communicate the purpose of the W-9 and how the information will be used and stored.
3. Refuse to sign contracts without a W-9: Establish a policy that requires vendors to provide a completed W-9 before commencing work. This ensures that you have the necessary information for income tax reporting purposes.
4. Any form of delivery is fine: A W-9 can be received on paper or, more easily, as an attachment to an email, text message, Slack message, or any other form of electronic delivery. The key is to store them in one place so you always have the information when you need it.

Ready to leverage automation for W-9 collection?

BILL's financial automation platform can help streamline your AP workflows—for 1099 contractors as well as other vendors—from start to finish.

• Import your invoices into BILL with little to no manual entry
• Let BILL route invoices to approvers automatically, according to the rules you set
• Get access to millions of vendors over the BILL network, plus more payment options—from ACH to credit card, check, and international wire transfer
• 2-way sync with leading accounting systems helps you reconcile your accounts faster and improve team productivity

As an added bonus, BILL helps you organize your tax information in one place, letting you view important details on a single screen. Easily verify W-9 status before you pay your contractors, and see the information you need for 1099 reportable payments at tax time. Plus, BILL makes data collection easy with AI that extracts and stores W-9 information, so you can review and confirm that info with just a few clicks.

Ready to make W-9 collection easier and streamline your bill payments? See how BILL can help.

Requesting W-9 from vendors FAQs

Here are quick, easy answers to some questions you may have concerning form W-9.

Can a vendor refuse to provide a W-9?

If a 1099 vendor wants to work for your company, they can't refuse to provide you with a W-9 form, but you still might run into trouble when you ask for one. For example, individuals who want to work as freelancers might not be familiar with the IRS rules or the W-9 process when they first start. As a result, they may be worried about providing personal information or complying with tax regulations.

However, the IRS requires vendors to provide a W-9 form so that the business paying them can accurately report payments made to the vendor. Failure to provide a W-9 form could result in penalties for the vendor as well as penalties for the company making the payments, especially if not having the form means that the associated 1099 form isn't filed on time during tax season.

What happens if someone refuses to fill out a W-9?

If someone refuses to fill out a W-9 form, they may face consequences such as not being able to receive payments or do business with the requesting party. Without this form, the payer may be unable to report the payments to the IRS, which could result in penalties for both parties.

Ultimately, if your business pays 1099 vendors, you have a responsibility to collect W-9 forms from them before they start working for you.

How should I store form W-9 from vendors?

It's important to store each Form W-9 securely to protect your vendors and make sure you have the information you need for tax reporting. According to the IRS, W-9 forms should be kept on file for at least four years in case of an audit.

You can store W-9 forms electronically to keep them easily accessible—just make sure they're stored securely, especially since your vendors have included sensitive information on those forms. Keeping organized records of Form W-9s will help streamline your tax reporting process and ensure compliance with IRS regulations.