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W-9 forms might seem like simple paperwork, but mistakes in handling them can lead to IRS fines, late filings, or even rejected 1099s.
Whether you manage contractors, freelancers, or vendors, it’s important to understand the most common errors. Below, we break down the top five W-9 mistakes and what you can do to prevent them.
1. Using an Outdated W-9 Form
IRS Rule: The current valid version is Form W-9 (Rev. March 2024).
Many businesses unknowingly use outdated W-9 forms. However, the IRS released an updated version in March 2024, replacing the 2018 revision.
What’s new in 2024?
- Line 3a clarifies that disregarded entities (like single-member LLCs) must check the tax classification of their owner.
- Line 3b is new and must be checked by partnerships, trusts, estates, or LLCs taxed as partnerships if they have any direct or indirect foreign partners, owners, or beneficiaries and are submitting the form to another flow-through entity.
What to do instead: Always download the latest W-9 directly from the IRS website. Even better, use a platform like GetW9 that keeps your forms up to date automatically.
2. Waiting Too Long to Collect the W-9
Why It Matters: No W-9 = no 1099 = IRS penalties.
Collecting W-9s after payment is risky. If you don’t have a form on file by the time tax season rolls around, you might not be able to file a 1099 and could face late fees or backup withholding.
🛠️ Fix it: Request the W-9 before issuing the first payment.
3. Storing W-9s in Insecure Locations
Security Risk: Spreadsheets and inboxes aren’t compliant.
Contractor data on a W-9 includes their legal name, address, and TIN (usually a Social Security Number). Storing these in unencrypted formats can put your business at risk of a data breach.
🛠️ Fix it: Use encrypted, access-controlled storage or let GetW9 handle it securely for you.
4. Not Verifying Taxpayer Identification Numbers (TINs)
Problem: A single digit off = IRS B-Notice + backup withholding.
If the TIN on a W-9 doesn’t match IRS records, you’ll receive a B-Notice requiring you to correct the issue or start backup withholding.
🛠️ Fix it: Use a TIN matching service or built-in IRS verification tools (like those in GetW9) to validate before filing.
5. Failing to Follow Up on Missing Forms
Impact: You’re on the hook if a contractor never submits a form.
It’s easy for a contractor to forget or ignore a W-9 request. But you’re still responsible for IRS compliance and manually following up can eat up your team’s time.
🛠️ Fix it: Automate reminders and cut off payment until a valid W-9 is submitted.
How to Automate W-9 Collection (and Never Chase Forms Again)
Instead of tracking forms in spreadsheets, following up by email, and stressing during tax season let GetW9 handle it for you.
✔️ Automatically request and collect W-9s
✔️ Store them securely and IRS-compliantly
✔️ Sync with your accounting or HR system
✔️ Stay audit-ready all year
