Why it matters
Without a W-9, a business may not have the tax ID it needs for a 1099, and a missing or incorrect tax ID can lead to a correction or backup withholding. Collecting the form before the first payment is the cleanest process.
Example
A business hires a new contractor. Before the first invoice is paid, the contractor completes a W-9 with the legal name, the LLC classification and the EIN, and uploads it through the business's secure link.
Related terms
Questions about Form W-9
When should a business collect a W-9?
Before the first payment to a new contractor or vendor. The payee is easiest to reach at setup, and the business needs the tax ID before it can prepare a 1099.
Does an LLC need a W-9?
Yes. The LLC completes the form and chooses its tax classification. A single-member LLC that is disregarded for tax purposes generally gives the owner's name and tax ID.