Withholding certificate. (148) Withholding certificate. The term withholding certificate means a Form W-8, Form W-9, or any other certificate that under the Code or regulations certifies or establishes the chapter 4 status of a payee or beneficial owner. Chapter 4 is regarding foreign persons accounts. W9 establishes chapter 4 payee status. Not to filled out by US citizen earning domestic source income
right on Max! Also, on the W-9 form, on page 5 where it says Part 2: Certification, the form states: "To establish to the WITHHOLDING AGENT that you are a U.S. person, or resident alien, sign Form W-9." Most people would read that and not deem that sentence significant. However, if you understand the legal definition of a "Withholding Agent," you would understand how significant that is! What is the definition of a "Withholding Agent?" 26 United States Code section 16 states (16)Withholding agent The term “withholding agent” means any person required to deduct and withhold any tax under the provisions of section 1441, 1442, 1443, or 1461. 1441 deals with withholding of income tax from Non Resident Aliens 1442 deals with Foreign corporations 1443 deals with Foreign tax exempt organizations 1461 deals with the Withholding Agent ALL of these individuals or entities are FOREIGN! Withholding Agents do NOT withhold taxes from US Citizens! This means that no American business should be giving a W-9 to an American citizen earning his own domestic income!
@@Liberty-fi7mg I would just add, a withholding agent is any person who has custody control and receipt of FOREIGN PERSONS income. So a withholding agent will withhold income tax from a US citizen, IF The US citizen is earning Foreign Sourced income. But nothing to do with a US Citizens domestic US sourced income.
@@max0390rip well I am not sure about that. What statute in the Internal Revenue Code would allow for what you described? According to the Statutes that I listed, Withholding Agents are listed in Chapter 3 of Title 26 which is for withholding of taxes from Foreigners, not US Citizens. Now a Withholding Agent may require a U.S. Citizen to sign a W-9 with his Taxpayer Identification Number IF a U.S. citizen was in Control of a Foreign Persons income. But I am not aware of any statute that would allow a person to withhold taxes from a US citizen if the US Citizen was earning foreign earned income. If a US Citizen was earning foreign earned income, either the Citizen was in control of the income entirely, or a Foreign Entity would be in control of that income. If the case was the latter, that entity would not be a Withholding Agent, because a Withholding Agent deals with United States sourced income, not income from foreign sources.
If I correctly assume you are an independent contractor (meaning you didn’t setup a formal legal entity structure with your State), you’d check “Individual/sole proprietor or single-member LLC”
@lenaaudrey - yes and at most. That portion is actually optional. Most businesses will have a signed w-9 on file to send. If it’s an individual or a small business, sending them a link to fill out the w-9 and send back is more than sufficient: www.irs.gov/pub/irs-prior/fw9--2024.pdf
@jiminswifewithjams4559 - let me see if I can get you straightened out: 1) You don't need to file a w-9 form with the IRS. You provide a w-9 to anyone who hires you. Check out this Twitter thread for a lot more detail: twitter.com/patrickbrayCPA/thread/1636485177122725890 2) If you made less than $600, then you are more than likely not going to receive a 1099 from the company or person who paid you (I'm assuming you are independent contractor here which might be a bad assumption 🤔). However, you still need to report your income on schedule C of your 1040 (again assuming you are independent contractor) - check out this YT short for further detail on that: th-cam.com/video/oPMBhv265uE/w-d-xo.html Hope that was helpful and good luck 👍
Only if you are a US PERSON (US citizen or resident Alien individual) who has custody and control of foreign persons US sourced income. W9 establishes chapter 4 payee status, chapter 4 dealing with foreign persons accounts.
I’m signing up for a stock trading app and it’s asking me to sign an electronic W9 after asking about my employment history. Am I subject to anything actually legal by acknowledging this? I’m only 19 years old by the way and work at an elementary school as a proctor (campus supervisor)
@909miklo - you are basically certifying that you have a SSN and this is what they use to send any tax forms related to any earnings you receive from your online brokerage account. For example, if you receive a dividend from owning shares of McDonalds, you will receive a 1099-DIV to report on your tax return.
I live on a private road, 12 houses, I paid up front to get the road fixed($14,000), one guy is trying to W-9 me before he reimburse me. I am not a business, I just paid it all up front so the gravel/dozer guy didn't have to try and get checks from everyone. Should I fill out a W-9? He owns a house on our road that he rents out.
@@patrickbrayCPA Thank you!!! I will just fill out the W-9 and I am sure hell 1099 me and I will just show my expenses on my income taxes to cancel it out?
@@freddyhollingsworth5945 reimbursable expenses are not taxable so if they handle the accounting properly and they should, you shouldn't receive a 1099. If you receive a 1099, I'd ask them to amend it to $0.
That is correct and assuming he is an “independent contractor” meaning he’s not incorporated, you would issue him a 1099-NEC by January 31st for the prior year instead of a W-2.
Independent contractor income will go on schedule C of your 1040. Also consider if you have any business expenses related to that income which might offset some of that income. This video might be helpful: How to Report Your Self Employed Income for Taxes th-cam.com/users/shortsoPMBhv265uE?feature=share
@@patrickbrayCPA I’m planning on starting a dog business, I’ve already invested and bought a couple of items, I don’t have a LLC at the moment so could I still file the things bought for my business?
Check that out: www.irs.gov/newsroom/earning-side-income-is-it-a-hobby-or-a-business I’m assuming you are in business since you generated $700 of income and if that is the case, you can deduct expenses related to your business to offset your 1099 income. If the business is not up and running, then technically you cannot deduct business expenses if the business isn’t in business.
If someone wants you to fill out a w9 for the dog business, you would use your SSN until you have a LLC or any other type of legal entity setup. Once that entity is setup, it’ll want to obtain its own Tax Id/EIN.
Were these repairs for a business or personal use? If you already paid the mechanic, you've unfortunately lost a lot of your leverage to obtain it. I typically like to ask for the W-9 before payment and won't pay the vendor or contractor until we have it. Technically, the IRS can fine them $50 for not providing a tax ID. Is that practically worth the effort? Probably not, but that option is available. Check out this article below for more info and good luck: polittelaw.com/blog/what-if-a-contractor-or-vendor-refuses-to-provide-a-w-9-for-a-1099/
Yeah that’s a tough one. If it’s a small shop and they are refusing, you have the right to report them to IRS. If it’s a larger business, sometimes you can get lucky and google its tax ID and send them a 1099 that way.
W9 establishes chapter 4 payee status chapter 4 dealing with foreign persons accounts. There is nothing in the law that requires the mechanic to file a W-9 with you. Unless the income is belonging to a foreign person or Nonresident alien individual. A US PERSON is either a US citizen or resident alien individual, a US PERSON is who uses a W-9 form. A withholding agent is any person who has custody and control of foreign persons US sourced income. To establish with the withholding agent that you are a US PERSON, fill out a W-9. Not sure how you are requiring the mechanic to file a W-9 when it appears you have never read the law pertaining to the W9 form?
@s.kay! - great question. Did you pay the vendor already? What I typically tell people to do is to request the w-9 before you pay the vendor because “it’s your policy” or “your company’s policy” to obtain a w-9 before releasing payment because at that point you have the leverage. Once you pay the vendor, it’s pretty hard to get the w-9 if they refuse. The IRS can fine someone for refusing to provide a w-9, but it’s more than likely not worth the effort to do so. Hope that was helpful and good luck!
@highounty4041 - couple responses for you: 1) You don't need to file a w-9 form with the IRS. You provide a w-9 to anyone who hires you. Check out this Twitter thread for detail: twitter.com/patrickbrayCPA/thread/1636485177122725890 2) How did you earn the $33k? Was it from a job where you received a W2 or was this self employed income?
Withholding certificate.
(148) Withholding certificate. The term withholding certificate means a Form W-8, Form W-9, or any other certificate that under the Code or regulations certifies or establishes the chapter 4 status of a payee or beneficial owner.
Chapter 4 is regarding foreign persons accounts.
W9 establishes chapter 4 payee status. Not to filled out by US citizen earning domestic source income
@max0390rip - Appreciate the additional information on that section! 👍
@@patrickbrayCPA no problem. Wish you "professionals" would learn the law and Inform the public. It's hard to find one that does.
right on Max! Also, on the W-9 form, on page 5 where it says Part 2: Certification, the form states: "To establish to the WITHHOLDING AGENT that you are a U.S. person, or
resident alien, sign Form W-9."
Most people would read that and not deem that sentence significant. However, if you understand the legal definition of a "Withholding Agent," you would understand how significant that is!
What is the definition of a "Withholding Agent?"
26 United States Code section 16 states
(16)Withholding agent
The term “withholding agent” means any person required to deduct and withhold any tax under the provisions of section 1441, 1442, 1443, or 1461.
1441 deals with withholding of income tax from Non Resident Aliens
1442 deals with Foreign corporations
1443 deals with Foreign tax exempt organizations
1461 deals with the Withholding Agent
ALL of these individuals or entities are FOREIGN! Withholding Agents do NOT withhold taxes from US Citizens! This means that no American business should be giving a W-9 to an American citizen earning his own domestic income!
@@Liberty-fi7mg I would just add, a withholding agent is any person who has custody control and receipt of FOREIGN PERSONS income.
So a withholding agent will withhold income tax from a US citizen, IF The US citizen is earning Foreign Sourced income.
But nothing to do with a US Citizens domestic US sourced income.
@@max0390rip well I am not sure about that. What statute in the Internal Revenue Code would allow for what you described? According to the Statutes that I listed, Withholding Agents are listed in Chapter 3 of Title 26 which is for withholding of taxes from Foreigners, not US Citizens.
Now a Withholding Agent may require a U.S. Citizen to sign a W-9 with his Taxpayer Identification Number IF a U.S. citizen was in Control of a Foreign Persons income.
But I am not aware of any statute that would allow a person to withhold taxes from a US citizen if the US Citizen was earning foreign earned income.
If a US Citizen was earning foreign earned income, either the Citizen was in control of the income entirely, or a Foreign Entity would be in control of that income.
If the case was the latter, that entity would not be a Withholding Agent, because a Withholding Agent deals with United States sourced income, not income from foreign sources.
Thank you
thank u bruh
Happy I was able to help 👊
Continue learning ➡️This is how long to keep TAX DOCUMENTS after filing a tax return
th-cam.com/video/w8uVpXgphTo/w-d-xo.html
What would be the appropriate box to check as a Lyft driver? Your time and help is appreciated. Thank you
If I correctly assume you are an independent contractor (meaning you didn’t setup a formal legal entity structure with your State), you’d check “Individual/sole proprietor or single-member LLC”
@@patrickbrayCPA I appreciate your reply. Thank you for your time and help.
Happy Holidays
Happy to help - Happy holidays to you as well!
hi, when I want to request the business's ein, should I only fill out the requestor portion of the w9?
@lenaaudrey - yes and at most. That portion is actually optional. Most businesses will have a signed w-9 on file to send. If it’s an individual or a small business, sending them a link to fill out the w-9 and send back is more than sufficient: www.irs.gov/pub/irs-prior/fw9--2024.pdf
I made less than $600 so what do I do then? Do I still need to file a W-9 with the irs, I’m so confused. Please help
@jiminswifewithjams4559 - let me see if I can get you straightened out:
1) You don't need to file a w-9 form with the IRS. You provide a w-9 to anyone who hires you. Check out this Twitter thread for a lot more detail: twitter.com/patrickbrayCPA/thread/1636485177122725890
2) If you made less than $600, then you are more than likely not going to receive a 1099 from the company or person who paid you (I'm assuming you are independent contractor here which might be a bad assumption 🤔). However, you still need to report your income on schedule C of your 1040 (again assuming you are independent contractor) - check out this YT short for further detail on that: th-cam.com/video/oPMBhv265uE/w-d-xo.html
Hope that was helpful and good luck 👍
Only if you are a US PERSON (US citizen or resident Alien individual) who has custody and control of foreign persons US sourced income.
W9 establishes chapter 4 payee status, chapter 4 dealing with foreign persons accounts.
@@max0390rip❤
I’m signing up for a stock trading app and it’s asking me to sign an electronic W9 after asking about my employment history. Am I subject to anything actually legal by acknowledging this? I’m only 19 years old by the way and work at an elementary school as a proctor (campus supervisor)
@909miklo - you are basically certifying that you have a SSN and this is what they use to send any tax forms related to any earnings you receive from your online brokerage account. For example, if you receive a dividend from owning shares of McDonalds, you will receive a 1099-DIV to report on your tax return.
I am an individual and received a B notice. How do I fill the W9?
See if this helps: twitter.com/patrickbraycpa/status/1636485177122725890?s=46&t=F1cXlZKeNLM7sA_fazD3vw
I formed a LLC but I'm the only member... what box should I check
The box that says "Individual/sole proprietor or
single-member LLC." You would be considered a single member LLC.
I live on a private road, 12 houses, I paid up front to get the road fixed($14,000), one guy is trying to W-9 me before he reimburse me. I am not a business, I just paid it all up front so the gravel/dozer guy didn't have to try and get checks from everyone. Should I fill out a W-9? He owns a house on our road that he rents out.
I can’t advise you what to do, but a lot of companies have a policy to obtain a w-9 before they pay anyone. It’s an accounts payable best practice.
@@patrickbrayCPA Thank you!!! I will just fill out the W-9 and I am sure hell 1099 me and I will just show my expenses on my income taxes to cancel it out?
@@freddyhollingsworth5945 reimbursable expenses are not taxable so if they handle the accounting properly and they should, you shouldn't receive a 1099. If you receive a 1099, I'd ask them to amend it to $0.
So if I pay my brother,not being on payroll he would have to fill this out?
That is correct and assuming he is an “independent contractor” meaning he’s not incorporated, you would issue him a 1099-NEC by January 31st for the prior year instead of a W-2.
This be helpful on 1099-NECs: th-cam.com/users/shortsnoteIJP1Joo?si=PBhz1Mr_I9brWyaS
how do i fill this as a canadian?
Do you have a United States social security number?
Hey If I Made $700 as a independent contractor and have a 1099, how do I fill out taxes ? What would the tax return be
Independent contractor income will go on schedule C of your 1040. Also consider if you have any business expenses related to that income which might offset some of that income. This video might be helpful:
How to Report Your Self Employed Income for Taxes
th-cam.com/users/shortsoPMBhv265uE?feature=share
@@patrickbrayCPA I’m planning on starting a dog business, I’ve already invested and bought a couple of items, I don’t have a LLC at the moment so could I still file the things bought for my business?
@@patrickbrayCPA I was emailed a w9 form
Check that out: www.irs.gov/newsroom/earning-side-income-is-it-a-hobby-or-a-business
I’m assuming you are in business since you generated $700 of income and if that is the case, you can deduct expenses related to your business to offset your 1099 income.
If the business is not up and running, then technically you cannot deduct business expenses if the business isn’t in business.
If someone wants you to fill out a w9 for the dog business, you would use your SSN until you have a LLC or any other type of legal entity setup. Once that entity is setup, it’ll want to obtain its own Tax Id/EIN.
My mechanic did 7500$ worth of repairs and is now flabbergasted that I asked for a W-9. He is refusing to fill it out. Now what
Were these repairs for a business or personal use?
If you already paid the mechanic, you've unfortunately lost a lot of your leverage to obtain it. I typically like to ask for the W-9 before payment and won't pay the vendor or contractor until we have it.
Technically, the IRS can fine them $50 for not providing a tax ID. Is that practically worth the effort? Probably not, but that option is available.
Check out this article below for more info and good luck:
polittelaw.com/blog/what-if-a-contractor-or-vendor-refuses-to-provide-a-w-9-for-a-1099/
@@patrickbrayCPA It was for my business, I have a written receipt paid in full. With his letterhead.
Yeah that’s a tough one. If it’s a small shop and they are refusing, you have the right to report them to IRS. If it’s a larger business, sometimes you can get lucky and google its tax ID and send them a 1099 that way.
W9 establishes chapter 4 payee status chapter 4 dealing with foreign persons accounts.
There is nothing in the law that requires the mechanic to file a W-9 with you. Unless the income is belonging to a foreign person or Nonresident alien individual.
A US PERSON is either a US citizen or resident alien individual, a US PERSON is who uses a W-9 form.
A withholding agent is any person who has custody and control of foreign persons US sourced income.
To establish with the withholding agent that you are a US PERSON, fill out a W-9.
Not sure how you are requiring the mechanic to file a W-9 when it appears you have never read the law pertaining to the W9 form?
@@max0390rip how am I supposed show expenditure
My mechanic did 700$ worth of repairs and is now flabbergasted that I asked for a W-9. He is refusing to fill it out. Now what?? pls
@s.kay! - great question. Did you pay the vendor already? What I typically tell people to do is to request the w-9 before you pay the vendor because “it’s your policy” or “your company’s policy” to obtain a w-9 before releasing payment because at that point you have the leverage. Once you pay the vendor, it’s pretty hard to get the w-9 if they refuse. The IRS can fine someone for refusing to provide a w-9, but it’s more than likely not worth the effort to do so. Hope that was helpful and good luck!
So if i made 33,150 how much will i have to pay in tax with the w9 form?
@highounty4041 - couple responses for you:
1) You don't need to file a w-9 form with the IRS. You provide a w-9 to anyone who hires you. Check out this Twitter thread for detail: twitter.com/patrickbrayCPA/thread/1636485177122725890
2) How did you earn the $33k? Was it from a job where you received a W2 or was this self employed income?
@@patrickbrayCPA If it was self employed income, how would we go about it?