W-9 vs 1099 MISC form – what, why and for whom

1099 is used to report about miscellaneous payments received during the calendar year by independent contractors/freelancers/individual contributors. It is issued by the IRS.

This blank should be filled for each subcontractor, who received from the employer one or more remunerations from the list:

  • Any amount greater than $600 per year in payments, services, awards, prizes, rents, insurance, and healthcare compensations.
  • $10 or more in broker amends or royalties in compensation of dividends of tax-exempt interest.
  • Any amount of reimbursements to an attorney.

1099 MISC vs W-9 – what form should you use

Sometimes nonemployees wrongly assume that 1099 is the same as Request for TIN paper, as both of these documents are issued by the Revenue Service and used to report certain information about a taxpayer. But there are some significant differences between these blanks – in fact, they are intended for different purposes.

How to choose a proper paper

So what document should you complete – 1099 misc or editable W-9 form? Take a look a simple table given below to answer your question:

You are You need to fill out
Independent contractor, freelancer, sole proprietor W-9
Company or LLC that employs nonemployee contractor, freelancer, sole proprietor 1099

1099 has to be completed by the employer to report about the taxable income received by the subcontractor. Unlike 1099 misc, W-9 is used to provide the IRS with taxpayers’ details and completed by the taxpayers themselves.

So if you are an independent contractor, sole proprietor or S-Corp (single-member LLC), you have to file and submit W-9. And if you are an employer, who buys services from the subcontractors and pays them more than $600 per year, you have to fill out 1099, using the data provided by the individual contributors in their IRS-issued tax forms.