So, you’re having trouble getting a W-9 from your contractors. Here are a few tips to help clean up the process.
1. Write a policy and procedure for on-boarding a new contractor. Specify who is in charge of obtaining the W-9 and signed contract. Be sure everyone understands their responsibilities.
2. Have a policy that states “No payment will be issued without a W-9. Follow through and do not bend the rules for anyone. Management MUST be in agreement with this vital policy.
3. Create your own W-9. Yes, you can! As long as the same information is on your home-made form, you’re good. Be sure and copy/paste the attestation the contractor signs from the W-9 to your own “Contractor Information Sheet”. Add any information you would like to have in addition to the standard W-9 info. The IRS does not care in what format you get the signed info as long as you get it!
4. Remember you are required to send a 1099-MISC in January to any contractor you pay more than $599 in a calendar year. No W-9 = No 1099. That = a fine!
5. If you are not diligent about your process and you are found to be using a contractor that turns out to be undocumented, you could be charged with employing an undocumented worker. That will get ICE involved and the audits and fines could increase greatly.
Bottom line? Get everyone in your organization on board with the policies and procedures necessary to meet IRS and ICE guidelines about using independent contractors. Without total cooperation, your company could be setting up for a major fail come audit time!
Until Next Time, Keep Calm and Employ On!
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