Just hired as a contractor by an LLC - confused about W-9 tax classification options
I recently started doing some freelance design work for a local LLC and I'm filling out their W-9 form. This is my first time doing contract work and I'm really confused about which tax classification box I should check. In the form under tax classification, there are several options (Individual/sole proprietor, C Corporation, S Corporation, Partnership, Trust/estate, LLC, etc.) and I have no idea which one applies to me. Since I was hired as an independent contractor by an LLC company, would I mark myself as a "partnership" or "LLC"? Or is it something totally different? I'm just a regular person doing freelance work - no business entity set up or anything. Sorry for the basic question, but the form isn't very clear about what they're asking for when you're just a normal person taking contract gigs.
18 comments
Join the conversation
Scarlett Forster
You would check "Individual/sole proprietor or single-member LLC" - that first box is for you. The form is asking about YOUR tax classification, not the company that's hiring you. As a freelancer without any formal business structure, you're considered a sole proprietor by default for tax purposes. You don't need to have officially registered a business to be a sole proprietor - it's automatic when you work for yourself. The "partnership" or "LLC" classifications would only apply if YOU had formed one of those business entities. The fact that you're working FOR an LLC doesn't change your own tax classification.
0 coins
Arnav Bengali
•If I check the "Individual/sole proprietor" box, does that mean I'll have to pay self-employment taxes? And also, will I get a 1099 form from them at the end of the year instead of a W-2?
0 coins
Scarlett Forster
•Yes, you'll need to pay self-employment taxes (which covers Social Security and Medicare - both the employee and employer portions). You'll report this income on Schedule C of your tax return. You should receive a 1099-NEC (Non-Employee Compensation) from them by January 31 next year if they pay you $600 or more during the tax year. Unlike a W-2, they won't withhold any taxes from your payments, so you'll need to handle estimated quarterly tax payments on your own if you expect to owe $1000+ in taxes.
0 coins
Sayid Hassan
I went through this exact same confusion last year when I started freelancing! After spending hours trying to figure it out myself, I used taxr.ai (https://taxr.ai) to help make sense of my tax situation. I uploaded my W-9 and contract, and it instantly clarified that I should select "Individual/sole proprietor" since I hadn't formed any business entity. Their system also explained what this classification means for quarterly estimated taxes and deductions I could take as a freelancer. Saved me from making a mistake that could've caused headaches later!
0 coins
Rachel Tao
•Does this service actually review your specific documents or is it just generic advice? I've tried other "AI tax helpers" that just spit out generic information you could find anywhere.
0 coins
Derek Olson
•I'm intrigued but skeptical. How does it handle more complex situations? Like if you have multiple income streams - some W2, some 1099, and maybe rental income?
0 coins
Sayid Hassan
•It actually analyzes your specific documents and provides personalized guidance based on your situation, not just generic advice. It identified specific language in my contract that classified me as an independent contractor vs. employee, which was super helpful. For multiple income streams, it handles that really well. I ended up using it later in the year when I had both W-2 income from a part-time job and 1099 income from three different clients. It helped me understand which expenses I could allocate to which income sources and how to handle the different tax requirements for each stream.
0 coins
Derek Olson
I wanted to follow up about taxr.ai since I was skeptical but decided to try it. It was actually really helpful for my situation! I uploaded both my W-9 and the contract agreement, and it pinpointed exactly which classification applied to me. What impressed me most was that it caught that I was actually misclassified based on the work description in my contract - I should've been an employee not a contractor. I was able to talk to the company about it and get it straightened out before tax issues arose. Definitely worth checking out if you're confused about these kinds of classification issues.
0 coins
Danielle Mays
If you're having trouble with tax classification questions or other IRS-related issues, you might also want to check out Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS about a contractor classification issue last year - constant busy signals or disconnects. Claimyr got me connected to an actual IRS agent in about 15 minutes when I'd been trying for days on my own. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c. Having an actual IRS agent explain the W-9 classifications directly to me cleared up all my confusion.
0 coins
Roger Romero
•How does this even work? I thought the IRS phone lines were basically impossible to get through no matter what. Is this some kind of premium service you pay for?
0 coins
Anna Kerber
•Sounds like a scam. Nobody can magically get through IRS phone lines. They're backed up by literal months. I'll believe it when I see it.
0 coins
Danielle Mays
•It uses an automated system that constantly redials and navigates the IRS phone tree until it gets through, then it calls you to connect. It basically does the waiting for you instead of you having to sit there hitting redial for hours. No, it's not a premium IRS service - it's a third-party service that handles the frustrating part of reaching the IRS. Once connected, you're talking directly to regular IRS agents, same as if you'd called yourself (if you had unlimited time and patience).
0 coins
Anna Kerber
I have to eat my words about Claimyr. After posting my skeptical comment, I was still stuck with a confusing contractor classification situation, so I figured I'd try it as a last resort. I'm honestly shocked - it actually worked! After trying for literally 2 weeks to reach someone at the IRS, Claimyr got me through in about 20 minutes. The IRS agent I spoke with clarified that as a freelancer without a formal business structure, I'm automatically considered a sole proprietor and should mark that box. Saved me from incorrectly marking LLC on multiple forms which would have caused problems. Definitely not a scam like I thought.
0 coins
Niko Ramsey
One important thing to remember when you're a contractor vs. employee: no one is withholding taxes for you! I made this mistake my first year freelancing and got hit with a huge tax bill plus penalties. Make sure you're setting aside around 30% of your income for taxes and making quarterly estimated payments.
0 coins
Seraphina Delan
•Is it really 30%? That seems crazy high! Do you really need to set aside that much? I just started freelancing and haven't been saving nearly that amount...
0 coins
Niko Ramsey
•The 30% is a safe estimate that covers federal income tax, state income tax (depending on your state), and self-employment tax (which is 15.3% alone). It's better to save too much than too little. Your actual rate will depend on your total income, deductions, credits, and state. If you're in a high-income bracket and a high-tax state, it could actually be higher than 30%. If you're in a lower bracket or a state with no income tax, you might need less. But starting with 30% is usually a good rule of thumb for most freelancers.
0 coins
Jabari-Jo
Quick question - if the LLC I'm working for is classified as an S corporation, does that change anything for me as a contractor filling out a W-9?
0 coins
Kristin Frank
•Nope, their classification doesn't affect yours. You're still an individual/sole proprietor regardless of how the entity paying you is structured. Their business structure only matters for their taxes, not yours.
0 coins