Note: We are not legal experts or tax preparation professionals, so always consult an accountant, tax prep professional, or attorney if you have concerns. This information is aimed at freelancers in the United States who have questions about a W-9 for freelance work. Freelancers in other locations may find this information useful for determining what questions they need to ask and answer based on their city, country, or region.
Not only is it common to issue a W-9 for freelance work, the fact that the client asked for one means they are following the rules.
A W-9 is similar to a W-4 form you fill out for an employer. And just like a W-4 helps your employer prepare to issue a W-2 at tax time, a W-9 sets the wheels in motion for the 1099-MISC tax form your client will owe you.
What’s in a W-9 Form?
While the W-9 form is relatively simple and only requires you to give a little bit of information, many freelancers are leery about giving out their Social Security Number. Now, don’t panic—most clients are interested in staying in business, and therefore would never use your SSN maliciously. They only need so they can file their own taxes appropriately.
Having said that, there is an alternative option for you. Regardless of your business structure, you can apply for an EIN—an Employer Identification Number.
It’s free to file and obtain. And, yes, even sole proprietors without any employees are eligible to apply! You do not need to have an LLC.
While an EIN is optional for sole proprietors, it’s required for other business structures. Take the super-simple yes/no test on the IRS website to find out whether you need one.
Keep in mind that if you already have an EIN and you change your business structure, you’ll need to apply for a new number (more on that here).
Peace of Mind When Filling Out a W-9 for Freelance Work
Having an EIN means you don’t have to send your SSN to any of your clients (unless you want to). Let’s face it: the IRS is skilled at finding out what money you owe, so it doesn’t matter to them whether you use your Social Security Number or your Employer Identification Number.
Once you decide which number to use, the remainder of the W-9 is straightforward. Pay attention to Line 2, which you’ll need to fill out if you registered a business name. However, if clients will pay you using your legal name, you can leave it blank. (Your URL is irrelevant to this question; you can have a URL that is different from your legal business name.)
Pro tip: Even if your client doesn’t initiate the W-9 conversation, you can always send them the filled out form with your invoice. You only need to do that if you know you’ll be billing them for more than $600. But this extra step on your part shows your professionalism, your proactivity, and is a gentle reminder that they’ll need to send you a 1099 during tax season.
(But even if they forget the 1099, you should still report that income!)
Besides the date, the information on your W-9 will not change each time you give it to a client. You can download the form directly from the IRS website.
Should You Use a W-4 or W-9 for Freelance Work?
Some clients may ask you to fill out a W-4 instead of a W-9. As noted above, a W-4 is the form used to onboard employees when an employer will be withholding payroll taxes from their paychecks.
If your client is classifying you as an employee, then fill out the W-4 instead of a W-9. While it’s relatively rare, some clients do actually hire freelancers as employees even for short-term projects.
Why would they do that? Well, the business may be required to classify you as an employee if the job is structured in a certain way. For example, if they are dictating what hours you need to be in the office or “on the clock” remotely, you may need to be an employe. The IRS has identified standards to distinguish between employees and freelancers. Check them out here.
If you’re classified as an employee, the client may be required to offer you additional benefits. So make sure to have a conversation to clarify and agree to mutual expectations.
No matter what, you don’t need to panic if your client asks you to fill out a form. Simply ask questions, or visit the IRS website to get more information about the necessity and purpose of the form. And of course, you can always ask an attorney or tax professional to walk you through it—without the jargon.
Your turn! Do your clients send you a W-9 or do you proactively send one? Share your experience in the comments below!