The W-9 form provides taxpayer identification information to another party (such as a business or individual) that needs to report certain types of income paid to you to the IRS. The main difference between a W-9 form used by a business and one used by an individual (personal use) lies in who is filling out the form and the purpose for which it is being filled out:
1. **W-9 Form for Businesses:**
- **Purpose:** A business uses the W-9 form to collect taxpayer identification information (TIN) from another business or individual (such as a contractor, vendor, or freelancer) to whom they will make payments requiring IRS reporting.
- **Usage:** Businesses typically request a W-9 from any individual or entity they expect to pay certain types of income to, such as payments for services, rents, royalties, etc.
- **Information Provided:** The business providing services or goods will complete the W-9 form with their legal business name, type of entity (individual, corporation, partnership, etc.), and their TIN (either a Social Security Number (SSN) or an Employer Identification Number (EIN)).
2. **W-9 Form for Personal Use:**
- **Purpose:** Individuals may also be required to fill out a W-9 form in certain situations, such as when they are providing services as an independent contractor or freelancer and need to provide their TIN to the business or client who is paying them.
- **Usage:** Individuals might fill out a W-9 form when they are receiving income that is not subject to withholding (like freelance income, interest income, dividends, etc.) and the payer needs their TIN for IRS reporting purposes.
- **Information Provided:** Individuals will provide their legal name, type of entity (individual, sole proprietorship, etc.), and their TIN (usually an SSN).
**Key Differences:**
- **Entity Type:** A business W-9 form is filled out by a legal entity (like a corporation, partnership, LLC, etc.), whereas a personal W-9 form is filled out by an individual or a sole proprietorship.
- **Nature of Relationship:** A business W-9 is often used in business-to-business transactions or when hiring independent contractors, while a personal W-9 might be used in freelance or personal income scenarios.
- **Reporting Purposes:** Both forms serve the purpose of providing taxpayer identification information, but the specific reporting requirements and contexts can vary based on whether it's a business or personal transaction.
In summary, the main distinction between a W-9 form used by a business and one used for personal purposes lies in who is filling it out and the context in which it is being used—whether for business transactions or personal income reporting requirements.
WE RECOMMEND GETTING AN EIN NUMBER AND FILING IT AS A BUSSINES