January 28, 2025

Navigating Individual 2024 Taxes: What You Need to Know About the W-9 Form

Article Summary:


Start the new year with peace of mind by reviewing or creating your estate plan! As life evolves, so should your approach to protecting your assets and loved ones.

Our latest blog breaks down key areas to focus on:

  • Updating Beneficiary and Ownership Designations: Ensure your accounts, deeds, and business interests align with your current intentions.
  • Reassessing Guardians and Beneficiaries: Life changes like births or marriages might necessitate adjustments to your estate plan.
  • Refreshing Powers of Attorney and Healthcare Directives: Keep these documents current to safeguard your autonomy and ensure your wishes are respected.

If you’re new to estate planning, don’t worry—our step-by-step guide will help you get started. The beginning of the year is the perfect time to act. Secure your legacy and protect what matters most with guidance from RMP's experienced estate planning attorneys.


Legal Topics

EMPLOYMENT LAW UPDATE: FEDERAL TRADE COMMISSION ELIMINATES NON-COMPETE CLAUSES

On Tuesday, the Federal Trade Commission issued a new Rule putting an end to employment-related non-compete clauses. In its justification for the rule, the FTC called non-compete clauses “an unfair method of competition” and stated it is a “violation for [employers] to… enter into non-compete clauses (“non-competes”) with workers.” In today’s very competitive labor market, the new FTC Rule creates a significant disruption for employers.

WHEN IS THE FTC ELIMINATION OF NON-COMPETE CLAUSES SET TO TAKE EFFECT?

This new FTC provision—set to take effect in 120 days—renders existing non-compete agreements unenforceable. Existing non-compete agreements with senior executives will remain enforceable, although employers cannot require newly hired senior executives to sign such an agreement.

WHAT REQUIREMENTS HAS THE FTC IMPOSED ON EMPLOYERS BY ELIMINATING NON-COMPETE CLAUSES?

After the Rule takes effect, employers are required to deliver personal notice to employees (past and present) who signed a non-compete agreement informing them agreements are no longer enforceable. In the notice, employers must inform employees they are free to accept any job or start any business, even if it is directly competitive with the employer.

IS THE FTC’S ELIMINATION OF THE NON-COMPETE CLAUSES OPTIONAL FOR EMPLOYERS?

Compliance with the FTC Rule is not optional. Employers should consider new ways they can protect against a former employee gaining a competitive advantage by using the employer- provided training, the relationships made possible by the employer, or the confidential information learned from the employer. RMP can assist you in navigating this disruption and can provide advice on how to most effectively protect your vital business interests going forward.

RMP: Your Employment Law Attorneys

RMP Attorneys At Law has an experienced Employment Law Attorney team dedicated to helping you navigate these changes. If you have any questions or would like guidance, reach out to one of our employment attorneys, Tim Hutchinson, Seth Haines, Larry McCredy, or Taylor Baltz or call  479.443.2705.

If you started a freelance career or are earning income from investments in 2024, you will need to complete a W-9 for the 2024 tax filing season. This form is an essential component of tax compliance, ensuring you and the entities paying you meet IRS requirements. Let’s explore what the W-9 is, who needs to complete it, and how it fits into the bigger picture of your financial responsibilities.

IRS W-9 Form

What Is a W-9 Form?

The W-9 form, formally called the “Request for Taxpayer Identification Number and Certification,” serves a crucial purpose: it provides your Taxpayer Identification Number (TIN), and other relevant information, to a payer who must report income paid to you. Whether you’re a freelancer, contractor, or investor, this form acts as a bridge between you, the payer, and the IRS.

Why Do I Need to Complete a W-9?

  • It provides necessary identification information to individuals and entities who pay you. 
  • It documents relevant aspects of your tax status for the payer.
  • It ensures accurate tax reporting for all parties involved.

Unlike employee forms like the W-4, the W-9 does not address ordinary matters of tax withholding and does not generally instruct the payer to withhold income tax from your pay. Instead, you are responsible for managing and paying your taxes, often through quarterly estimated tax payments.

If you anticipate owing $1,000 or more in taxes on income that is not subject to withholding (e.g., salary and wages), paying your estimated quarterly taxes is generally necessary to prevent unforeseen tax penalties.

Do I need a W-9 Form?

You’ll likely need to complete a W-9 if you:

  • Work as a freelancer, independent contractor, or consultant.
  • Provide professional services under a sole proprietorship.
  • Earn rental income, awards, or prizes.
  • Receive financial income, like interest or dividends, from investments.
  • Owe a debt that is canceled or forgiven.

The payer—whether a client, financial institution or other entity—uses the W-9 details to prepare forms like the 1099-NEC (Nonemployee Compensation) or 1099-INT (Interest Income), which are provided to you, the payee, for tax reporting purposes.

How do I complete a W-9?

Filling out a W-9 is straightforward, but accuracy is critical. Here’s how to get it right:

  1. Enter Your Name and Business Details: Use your full legal name. If you operate under a business name, include it where applicable.
  2. Provide Your Taxpayer Identification Number (TIN): This is your Social Security Number (SSN) or Employer Identification Number (EIN), depending on your tax classification.
  3. Certify the Form: Sign and date the form to confirm that the information is accurate and complete.

Keep your W-9 updated. If you change your name, address, or TIN, notify the payer promptly to avoid delays or misreporting.

The Role of the W-9 in Tax Reporting

While the W-9 isn’t filed with the IRS, it’s instrumental in tax reporting. Here’s how it connects to your taxes:

  • Payers use W-9 information to create 1099 forms documenting your income.
  • You’ll use these 1099 forms to help you accurately report your income on your tax return.

Remember, while you can generally rely on the amounts reported on 1099 forms, you are taxed on the income you receive, not simply what is reflected on a 1099 form. If you believe a mistake has been made on a 1099 you receive, you should try to obtain a corrected 1099 form.

Key Tax Tips for W-9 Recipients

Backup Withholding

Failing to provide a correct TIN could result in backup withholding, where the payer withholds 24% of your payments for taxes.

Stay Organized

Retain copies of your completed W-9 forms for reference.

Plan for Self-Employment Taxes

Independent contractors should account for self-employment taxes and income taxes.

Track Deductible Expenses

Expenses like office supplies, software, and travel costs can help lower your taxable income.

Take Charge of Your Taxes

Understanding the W-9 form and its role in your tax obligations can make a big difference in managing your financial life. Completing the form accurately and staying proactive with tax planning will ensure compliance and reduce stress come tax season.

If you have questions or need guidance, contact an RMP tax professional to help you confidently navigate the process.

RMP Tax Law & Tax Planning Lawyers

Adam C Flock

Tax Law

Denton Woods

Tax Law & Tax Planning

Hunter Bedell

Tax Law & Tax Planning

Estate Planning Lawyer in Arkansas, RMP Law

John Neihouse

Tax Law & Tax Planning

Kasper Huber

Tax Law & Tax Planning

Neal Pendergraft

Tax Law & Tax Planning

Taylor Baltz

Tax Law & Tax Planning

Alex Miller

Tax Law & Tax Planning

Hannah Van Horn

Tax Law & Tax Planning

John Lessel

Tax Law & Tax Planning

Estate Planning Lawyer in Arkansas, RMP Law

Joseph D. Reece

Tax Law & Tax Planning

Lee Moore

Tax Law & Tax Planning

Sierra N Glover

Tax Planning

If you started a freelance career or are earning income from investments in 2024, you will need to complete a W-9 for the 2024 tax filing season. This form is an essential component of tax compliance, ensuring you and the entities paying you meet IRS requirements. Let’s explore what the W-9 is, who needs to complete it, and how it fits into the bigger picture of your financial responsibilities.

IRS W-9 Form

What Is a W-9 Form?

The W-9 form, formally called the “Request for Taxpayer Identification Number and Certification,” serves a crucial purpose: it provides your Taxpayer Identification Number (TIN), and other relevant information, to a payer who must report income paid to you. Whether you’re a freelancer, contractor, or investor, this form acts as a bridge between you, the payer, and the IRS.

Why Do I Need to Complete a W-9?

  • It provides necessary identification information to individuals and entities who pay you. 
  • It documents relevant aspects of your tax status for the payer.
  • It ensures accurate tax reporting for all parties involved.

Unlike employee forms like the W-4, the W-9 does not address ordinary matters of tax withholding and does not generally instruct the payer to withhold income tax from your pay. Instead, you are responsible for managing and paying your taxes, often through quarterly estimated tax payments.

If you anticipate owing $1,000 or more in taxes on income that is not subject to withholding (e.g., salary and wages), paying your estimated quarterly taxes is generally necessary to prevent unforeseen tax penalties.

Do I need a W-9 Form?

You’ll likely need to complete a W-9 if you:

  • Work as a freelancer, independent contractor, or consultant.
  • Provide professional services under a sole proprietorship.
  • Earn rental income, awards, or prizes.
  • Receive financial income, like interest or dividends, from investments.
  • Owe a debt that is canceled or forgiven.

The payer—whether a client, financial institution or other entity—uses the W-9 details to prepare forms like the 1099-NEC (Nonemployee Compensation) or 1099-INT (Interest Income), which are provided to you, the payee, for tax reporting purposes.

How do I complete a W-9?

Filling out a W-9 is straightforward, but accuracy is critical. Here’s how to get it right:

  1. Enter Your Name and Business Details: Use your full legal name. If you operate under a business name, include it where applicable.
  2. Provide Your Taxpayer Identification Number (TIN): This is your Social Security Number (SSN) or Employer Identification Number (EIN), depending on your tax classification.
  3. Certify the Form: Sign and date the form to confirm that the information is accurate and complete.

Keep your W-9 updated. If you change your name, address, or TIN, notify the payer promptly to avoid delays or misreporting.

The Role of the W-9 in Tax Reporting

While the W-9 isn’t filed with the IRS, it’s instrumental in tax reporting. Here’s how it connects to your taxes:

  • Payers use W-9 information to create 1099 forms documenting your income.
  • You’ll use these 1099 forms to help you accurately report your income on your tax return.

Remember, while you can generally rely on the amounts reported on 1099 forms, you are taxed on the income you receive, not simply what is reflected on a 1099 form. If you believe a mistake has been made on a 1099 you receive, you should try to obtain a corrected 1099 form.

Key Tax Tips for W-9 Recipients

Backup Withholding

Failing to provide a correct TIN could result in backup withholding, where the payer withholds 24% of your payments for taxes.

Stay Organized

Retain copies of your completed W-9 forms for reference.

Plan for Self-Employment Taxes

Independent contractors should account for self-employment taxes and income taxes.

Track Deductible Expenses

Expenses like office supplies, software, and travel costs can help lower your taxable income.

Take Charge of Your Taxes

Understanding the W-9 form and its role in your tax obligations can make a big difference in managing your financial life. Completing the form accurately and staying proactive with tax planning will ensure compliance and reduce stress come tax season.

If you have questions or need guidance, contact an RMP tax professional to help you confidently navigate the process.

RMP Tax Law & Tax Planning Lawyers

Adam C Flock

Tax Law

Denton Woods

Tax Law & Tax Planning

Hunter Bedell

Tax Law & Tax Planning

Estate Planning Lawyer in Arkansas, RMP Law

John Neihouse

Tax Law & Tax Planning

Kasper Huber

Tax Law & Tax Planning

Neal Pendergraft

Tax Law & Tax Planning

Taylor Baltz

Tax Law & Tax Planning

Alex Miller

Tax Law & Tax Planning

Hannah Van Horn

Tax Law & Tax Planning

John Lessel

Tax Law & Tax Planning

Estate Planning Lawyer in Arkansas, RMP Law

Joseph D. Reece

Tax Law & Tax Planning

Lee Moore

Tax Law & Tax Planning

Sierra N Glover

Tax Planning

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