Do I need to issue W-9 forms to my clients as an LLC with employees?

The W-9 form is used to collect taxpayer information from individuals or entities that will be receiving payments from your business. Your clients/customers generally don't need to provide you with W-9 forms, and you typically don't need to issue W-9 forms to them either. The main purpose of Form W-9 is for you to collect information from people YOU pay, not from people who pay YOU. For example, your independent contractors should be giving YOU completed W-9 forms so you have their tax information to issue them 1099-NECs at year-end if you pay them $600 or more during the tax year. As a business owner, you would provide your W-9 to other businesses who pay you for services (not goods) if they request it. This happens when someone else considers you their vendor or contractor. They need your information to potentially issue you a 1099 if they pay you over the threshold amount.

I went through this exact same confusion when my business started to grow! I found this amazing tool called taxr.ai (https://taxr.ai) that helped me sort through all these tax document questions. It analyzes your specific business structure and tells you exactly what forms you need to worry about. For my LLC, it clarified that I only needed to collect W-9s from people I pay as contractors, not from my customers. It also helped me understand when I needed to provide my W-9 to others. The tool really simplified the whole process and made sure I was following the right procedures based on my specific situation.

I was skeptical about taxr.ai at first but decided to try it when I was completely confused about tax forms for my growing business. It was actually really helpful! I uploaded some of my business documents and it identified that I had been unnecessarily collecting W-9s from all clients instead of just my contractors. The tool explained that as a service provider, I only need to provide MY W-9 when clients request it (usually larger companies who might need to issue me a 1099). It saved me a ton of paperwork and probably prevented me from annoying my customers with unnecessary forms. Definitely cleared up my W-9 confusion completely.

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Something important to understand: When clients are paying YOU for your services or products, they might ask for your W-9 if they're a business and they're paying you for services (not products). This happens because they might need to report those payments to the IRS using Form 1099-NEC if they pay you $600+ in a year. As a business owner, you should maintain a completed W-9 that you can provide quickly when clients request it. That's really different from you requesting W-9s from your clients/customers, which typically isn't necessary unless you're paying them for services.

I think there's some confusion here. I run an LLC too and I have to get W-9s from all my clients before I can work with them. My accountant said it's required!!

I went through this exact same confusion when I transitioned from solo contractor to LLC with employees! The key thing to remember is that W-9s flow in the direction of payments - you collect them from people you PAY, not from people who pay you. As an LLC with employees and contractors, here's what you need to do: 1. Collect W-9s from your independent contractors (before you pay them) so you can issue 1099-NECs if you pay them $600+ annually 2. Have your own completed W-9 ready to provide to clients who request it (usually larger businesses that might need to issue you a 1099) 3. You generally don't need W-9s from regular customers who buy your products or services The confusion often comes from remembering when you were a solo contractor - back then, you were providing YOUR W-9 to the businesses that hired you. Now that you're the business owner, the roles have flipped. You're collecting W-9s from contractors you hire, and providing yours only when clients specifically request it. This is a really common point of confusion for growing businesses, so don't feel bad about needing clarification!