Taxpayer asks:
If I’m paid in cash can they make me fill out a w-9?
Taxgirl says:
Yes. How you’re paid – in cash, by check, in Bitcoin or barter – doesn’t matter when it comes to filling out a form W-9.
A form W-9 is used to provide your taxpayer identification number (such as your Social Security Number (SSN) or your Employer Identification Number (EIN)) to certain payers. The form is typically completed by U.S. persons (citizens or resident aliens), domestics trusts and estates, and a partnership, corporation, company, or association created or organized in or under the laws of the United States.
You might be asked to complete a form W-9 when you have provided services as an independent contractor or a freelancer. The person who is paying you for those services – no matter how you’re paid – may be required to report the payments to IRS (Internal Revenue Service), typically using a form 1099.
There are also circumstances when the IRS requires the person who is paying you to withhold a portion of your payment and remit that amount to the IRS. That withholding, which is a flat 28% of the amount to be paid, is called “backup withholding.” Backup withholding is required when:
- You don’t provide your Taxpayer Identification Number (or “TIN,” generally, your EIN, SSN or ITIN) when required;
- You provided the wrong TIN (or the IRS says that you did); or
- You are required, but fail, to certify that you are not subject to backup withholding.
If you’re not subject to backup withholding, no other taxes will be withheld from your check (or cash, Bitcoin, etc.). Filling out a form W-9 does not trigger withholding for other taxes, such as income taxes or Social Security payments.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
