Forms W9 W8 W2

Form W9 – Obtaining correct TIN

What is Form W9?

Form W-9 is a commonly used Internal Revenue Service (IRS) tax form for providing necessary information to a person or company making payments to another person or company.

What information does W9 contain?

It is used to confirm a person’s name, address, and taxpayer identification number (TIN) of an individual who is receiving income. An entity that is required to file Form 1099 must obtain the correct TIN of the income receiving party. 

Purpose of Form W-9

Based on the information provided in the W-9 Form, the payer generates a 1099 tax form and shares it with the payee for income tax filing purposes. 

Who is responsible for W-9?

The person or business making payment asks you to file the W-9 Form and share it with them. It helps them to determine whether there is any federal tax withholding on such payments.

For instance, if you are working as a vendor, freelancer, or receiving the specified incomes, you may be asked to fill Form W-9 and submit it to the person or entity from which you will receive income. 

Similarly, banks, brokerage firms, and other financial institutions can ask you to complete Form W-9 to prepare your 1099s.

Validity of Form W9

Form W-9 remains valid for a lifetime unless there is a change in circumstances and such circumstances make the required information incorrect or unreliable.

Form W8 – Verify the country of residence 

What are W8 forms?

The foreign individuals and businesses must file Form W8 to verify their country of residence for tax purposes. The Form also contains the details of whether or not you are claiming a reduced rate of, or exemption from, withholding.

Who is responsible for W8?

All foreign individuals or entities, fulfilling the following conditions:

• Doesn’t have U.S. citizenship or residency and
• Have worked and earned in the U.S.

Validity of W8 forms

All W-8 forms are valid for the current year (in which they are signed) and for the next three full calendar years.

Types of Form W8

There are five W-8 forms:

• W-8BEN,
• W-8BEN-E,
• W-8ECI,
• W-8EXP, and
• W-8IMY.

Form W2 – Income earned and amount of taxes withheld from the paycheck

What for Form W2?

Form W-2 (the Wage and Tax Statement) is the document that every employer who pays remuneration to their employees is required to file a Form W2.  

If you are working, then you will receive Form W2. You may also receive multiple W-2 if you:

• Changed jobs within the calendar year, or
• Work as an employee at more than one job, or
• When there is an acquisition of companies in which you are working 

Purpose of Form W2

A W-2 reports employees’ annual wages and the amount of federal, state, and other taxes withheld from your paycheck. It also helps the IRS to track individuals’ tax obligations. 

And, when the employee files taxes, then they are eligible to deduct the amount of tax withheld according to the W-2 from their gross tax obligation.

Who is responsible for W2?

An employer is legally bound to send out a W-2 form to every employee to whom they paid a salary, wage, or another form of compensation on or before January 31 every year.

When to file Form W2?

An employer must file W-2 forms with the Social Security Administration (SSA) and the IRS on or before January 31. However, the extension of 30 days is allowed after submitting Form 8809, i.e., Application for Extension of Time to File Information Returns.