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The IRS Form W-9 & IRS Form 1099 are often interchangeably used when referring to year-end tax forms, however, both forms are very different and serve different purposes. Here’s a quick summary of what each form is:
Form W-9
- The Form W-9 is used to obtain data such as name, address & tax identification number from your contractors, vendors, suppliers, etc.
- The W-9 is not an annual form, it should be collected throughout the year from whomever you issue payments to.
- The W-9 does not get filed with the IRS or any agency. You keep it in your records.
- You do not need a W-9 from your employees, they would provide you with a W-4.
Form 1099
- A 1099 is issued to various types of contractors, vendors, suppliers, landlords, etc. to whom you made payments during the calendar year.
- There are many types of 1099 forms, such as 1099-NEC (nonemployee compensation), 1099-MISC, 1099-INT, etc.
- A copy of the 1099 does get filed with the IRS and certain state agencies, and you also send your contractors, vendors, suppliers, landlords, etc., a copy of the 1099 after the year has ended.
- Failure to issue a required 1099 could cause you to potentially loose a deduction/expense on your business tax return.
We highly recommend that you have a potential vendor, supplier, or independent contractor complete a Form W-9 prior to engaging in business with him or her.
