Freelance Carpentry Gig Now Asking for W9 Form - What Does This Mean?
I've been doing weekend carpentry and handyman work for a local property management company for the past couple years. It's been pretty casual - they pay me through cash and occasionally Venmo. I usually work about two weekends each month. Yesterday I got a text saying their new accountant wants me to fill out a W9 for 2024. I'm not really sure what this means for my taxes. Am I going to end up owing like 15% of what they've paid me throughout the year? Can I just say no to filling out the W9? What happens if I refuse - are there penalties or can they take some kind of action against me? I've never had to deal with this before and I'm worried about suddenly owing a bunch of money.
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Maxwell St. Laurent
The W9 is just an information form that businesses use to get your taxpayer identification info (usually your SSN). It doesn't automatically mean you'll owe taxes, but it does mean they're likely planning to report your earnings to the IRS by issuing you a 1099-NEC form if they pay you $600 or more during the year. Technically, you've always been required to report this income on your tax return, even when paid in cash or Venmo. So the W9 doesn't create a new tax obligation - it just means they're starting to properly document the arrangement. The self-employment tax rate is around 15.3% (covers Social Security and Medicare), plus any income tax based on your total annual income.
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PaulineW
•But if they've been paying cash all this time and suddenly switch to reporting it, won't that raise red flags with the IRS about previous years? I'm asking for a friend lol
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Maxwell St. Laurent
•The IRS generally focuses on current and future compliance rather than hunting through past years. While technically they could look back, it's unlikely they'd audit previous years just because someone starts receiving 1099s now. The important thing is to be honest going forward. As for the self-employment tax concern, there's also a bright side - when you properly report self-employment income, you can deduct legitimate business expenses like tools, materials, mileage, and even a portion of your phone bill if you use it for this work. These deductions can significantly reduce your taxable income.
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Annabel Kimball
I was in almost the exact same situation last year with my side gig doing landscaping. The W9 thing freaked me out too, but I found this tool called taxr.ai (https://taxr.ai) that really helped me figure out what I needed to do. It analyzed my situation and explained all the deductions I could take as a self-employed person that I had no idea about!
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Chris Elmeda
•Does it actually work for figuring out what counts as a business expense? I do photography on weekends and have no idea what I can write off.
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Jean Claude
•How does it compare to something like TurboTax for self-employment stuff? I've used that before but it doesn't really explain things well.
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Annabel Kimball
•For photography business expenses, it breaks down exactly what you can deduct - everything from obvious stuff like camera equipment to things you might not think of like a percentage of your home internet if you use it to upload/edit photos, even mileage to photo shoots. It was super clear about what documentation to keep too. Compared to TurboTax, the big difference is that taxr.ai actually explains WHY certain things are deductible instead of just asking yes/no questions. It feels more like having a conversation with a tax pro who's teaching you rather than just filling in forms. Plus it helped me plan quarterly payments which TurboTax never mentioned until I owed penalties.
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Chris Elmeda
Just wanted to follow up about taxr.ai after trying it. Wow! I uploaded some of my messy expense receipts and payment records from my photography gigs, and it organized everything into proper categories. Found out I could deduct my camera bag, SD cards, and even part of my phone bill since I use it for client communication. The mileage tracking feature alone saved me hundreds! Definitely less stressful than I thought getting a 1099 would be.
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Charity Cohan
If you're worried about dealing with the IRS over this new 1099 situation, you might want to check out Claimyr (https://claimyr.com). I was freaking out last year when I suddenly got a 1099 from my side hustle and needed to talk to someone at the IRS about what forms to file. Spent DAYS trying to get through on the phone with no luck. Claimyr got me connected to an actual IRS person in like 45 minutes instead of the usual hours of hold time. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent I talked to walked me through exactly what I needed to do as a first-time 1099 recipient.
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Josef Tearle
•Wait how does this actually work? Isn't the IRS phone line the same for everyone? How do they get you through faster?
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Shelby Bauman
•Yeah right, sounds like bs to me. Nobody gets through to the IRS that quick. I tried calling for weeks last year.
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Charity Cohan
•They use some kind of automated system that continuously calls and navigates the IRS phone tree until it gets through, then it calls you back when it has a human on the line. It's not skipping the line - it's basically waiting in line for you so you don't have to sit there listening to hold music for hours. The reason it's faster than doing it yourself is that their system can keep dialing back automatically when it gets disconnected or handles busy signals, which happens constantly with the IRS lines. I literally had given up after trying for days before using this.
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Shelby Bauman
Ok I have to eat my words about Claimyr. After my skeptical comment I decided to try it anyway because I was desperate to figure out my 1099 situation from DoorDash. Got connected to an IRS agent in about an hour. The lady was super helpful and explained I needed to file Schedule C and SE forms, and told me what estimated tax payments I should be making. Probably saved me from a penalty just from that call. Sometimes being proven wrong is a good thing!
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Quinn Herbert
Just want to point out - fill out the W9, but also start tracking ALL your expenses related to the side work! Keep receipts for: - Tools and equipment - Gas/mileage driving to job sites - Work clothes that you don't wear normally - Supplies you purchase - Any software/apps you use for the business - Cell phone percentage used for work - Part of your home if you store equipment there I made the mistake of not tracking expenses my first year and paid WAY more tax than I needed to.
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Salim Nasir
•Do you need actual receipts for all of that or just like a log you keep yourself? I never keep home depot receipts but I spend a ton there for my handyman jobs.
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Quinn Herbert
•For big purchases (like power tools over $100), definitely keep the actual receipts or at least the email confirmation if you bought online. For smaller stuff, a log is usually fine as long as it's reasonable and you note what was purchased, the date, and amount. Credit card statements can back this up too. The IRS is mainly looking for a consistent record - don't just make up a bunch of expenses at tax time. I use a simple app that lets me take quick photos of receipts right after purchasing. Makes a huge difference when tax season rolls around and I've forgotten what I bought.
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Hazel Garcia
Has anyone calculated roughly how much you need to set aside from these 1099 payments? I just got asked to fill out W9 too for my DJ side gig and I'm trying to budget.
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Laila Fury
•I put aside 30% of everything I make from my 1099 work. It's probably overkill, but I'd rather get a refund than owe money. After deductions it usually works out to owing around 20-25%.
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Ava Martinez
The key thing to understand is that you were already legally required to report and pay taxes on this income, even when it was paid in cash or Venmo. The W9 doesn't change your tax obligation - it just means the company is now going to properly report what they pay you to the IRS. You can't really refuse to fill out the W9 if you want to keep working for them. Companies are required to get this form from contractors they pay $600+ per year. If you refuse, they'll likely stop using your services or withhold 24% backup withholding from your payments. Start setting aside about 25-30% of what you earn going forward for taxes. You'll owe self-employment tax (15.3%) plus regular income tax on the net profit. But the good news is you can deduct all your legitimate business expenses - tools, materials, vehicle expenses for driving to jobs, work clothes, etc. These deductions can significantly reduce what you actually owe. Consider making quarterly estimated tax payments to avoid penalties. And definitely start keeping detailed records of all your work-related expenses from now on!
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