Need help with W9 form box 3 classification - unsure what to select
Hey everyone, I'm filling out a W9 form for my side business and I'm stuck on box 3. I run a small online shop selling handmade crafts, but I also do some freelance graphic design work. Not sure if I should check "Individual/sole proprietor or single-member LLC" or "Limited liability company" since I registered as an LLC last year but it's just me running everything. Does anyone know which classification is correct for my situation? I don't want to mess this up and have tax issues later. Thanks in advance for any advice!
20 comments
Join the conversation
NebulaNinja
The answer depends on how your LLC is set up for tax purposes. If you're the only member of your LLC and you haven't elected to be taxed as a corporation, then your LLC is treated as a "disregarded entity" for federal tax purposes. In this case, you would check "Individual/sole proprietor or single-member LLC" on the W9. If you've elected to have your LLC taxed as a corporation (either S-corp or C-corp), then you would check "Limited liability company" and enter the appropriate tax classification code (C for C-corp, S for S-corp).
0 coins
Fatima Al-Suwaidi
•Thanks for explaining! Quick follow-up question - if I originally registered as an LLC but never specifically elected to be taxed as a corporation, what would I be by default? Also, if I check "Individual/sole proprietor or single-member LLC" box, do I still need to provide my LLC name somewhere on the form?
0 coins
NebulaNinja
•By default, a single-member LLC is treated as a disregarded entity for federal tax purposes unless you specifically elected otherwise. So if you never filed Form 8832 or Form 2553 to elect corporate taxation, you would check "Individual/sole proprietor or single-member LLC." For the name on the W9, you should enter your name on the "Name" line and your business name/LLC name on the "Business name/disregarded entity name" line. This way, your payments will be properly reported under your Social Security Number, but with reference to your business entity.
0 coins
Dylan Mitchell
I had the same confusion when filling out W9 forms for my consulting business. After spending hours researching, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out exactly what to check. You upload your business formation documents and answer a few questions, and it tells you exactly which box to select based on your specific situation. Saved me from making a costly mistake on my classification!
0 coins
Sofia Morales
•Does this work if you're in the process of changing from sole prop to LLC? I'm about to make that transition and need to update all my client paperwork.
0 coins
Dmitry Popov
•Sounds interesting but how accurate is it? I've been burned before by tax tools that gave me wrong info. Does it just tell you what box to check or does it explain why?
0 coins
Dylan Mitchell
•It definitely works for transitions between business types - that's actually one of the main features that helped me. The tool has a specific questionnaire about business structure changes that guides you through the process. It not only tells you which box to check but explains the reasoning behind it with references to specific IRS regulations. You can even download a PDF summary of the recommendation with citations to show your accountant or keep for your records. The explanations are really clear and in plain English, not full of confusing tax jargon.
0 coins
Sofia Morales
Just wanted to update - I tried taxr.ai after seeing it mentioned here and it was super helpful! Turns out I was about to check the wrong box on my W9. Since I formed an LLC but never filed any special tax elections, I needed to check the "Individual/sole proprietor or single-member LLC" box, not the "Limited liability company" box like I was planning. The site explained that single-member LLCs are "disregarded entities" by default for federal tax purposes. Saved me from a potential headache down the road!
0 coins
Ava Garcia
If you're still struggling with your W9 form and need to talk to an actual IRS agent to confirm the right box (which I highly recommend), try Claimyr (https://claimyr.com). I was pulling my hair out trying to get someone on the phone at the IRS for weeks with no luck. Saw a video demo of their service (https://youtu.be/_kiP6q8DX5c) and decided to give it a shot. They got me connected to an IRS representative in under 20 minutes when I'd been trying for days on my own! The agent confirmed my W9 classification question and even explained some other business tax issues I was confused about.
0 coins
StarSailor}
•Wait how does this work exactly? Does it just connect you faster to the IRS phone line? I've been on hold for like 2 hours multiple times and eventually just gave up.
0 coins
Miguel Silva
•This sounds like BS honestly. The IRS wait times are crazy because they're understaffed. How could some random service possibly get you through faster than anyone else? Sounds like a scam to me.
0 coins
Ava Garcia
•It uses a callback system that monitors the IRS phone lines and calls you when it's your turn - so you don't have to wait on hold. It basically does the waiting for you and rings your phone when an agent is about to be available. You just answer and you're connected directly to the IRS. I was skeptical too! But it's not magic - they're just using technology to handle the waiting part. You still talk directly to the actual IRS, they just save you from the hold music and wasted time. The fee was worth it to me because I needed answers quickly for a big client project and couldn't waste more days trying to get through.
0 coins
Miguel Silva
Ok I need to eat some humble pie here. After saying that Claimyr sounded like BS, I was desperate to get an answer about my W9 classification since I have both 1099 work and a small business LLC. I tried the service and honestly it worked exactly as advertised. Got connected to an IRS agent in about 18 minutes when I'd previously tried calling 3 times and gave up after 90+ minutes on hold each time. The agent confirmed exactly what box I needed to check based on my specific situation. Wish I'd known about this sooner!
0 coins
Zainab Ismail
One thing to remember with W9s - if you're a single-member LLC being treated as a disregarded entity, you still use your SSN (not an EIN) unless you have employees. My accountant says this is one of the most common mistakes people make. They think LLC automatically means using an EIN.
0 coins
Connor O'Neill
•What about if you're a single-member LLC but you got an EIN anyway? I applied for one when I formed my LLC because I thought I needed it. Can I still use it on my W9 or do I have to use my SSN?
0 coins
Zainab Ismail
•You can still use your EIN on the W9 even if you're a single-member LLC being treated as a disregarded entity. Having an EIN for your business is actually smart for various reasons including identity protection. When you fill out the W9, you'll check the "Individual/sole proprietor or single-member LLC" box, enter your LLC name on the "Business name/disregarded entity name" line, and then you can use either your SSN or your EIN in Part I. Using the EIN helps keep your SSN more private, which many business owners prefer.
0 coins
Yara Nassar
Watch out for state tax differences too! The W9 is federal, but some states treat single-member LLCs differently than the IRS does. Here in California, I still have to file a separate tax return for my LLC and pay an annual $800 fee even though it's disregarded federally.
0 coins
Keisha Robinson
•That's true in New York too... our state wants both sets of paperwork. I didn't realize this my first year and ended up with penalty fees. Does anyone know a good resource that breaks down state-by-state LLC requirements?
0 coins
Harper Thompson
This is such a common source of confusion! I went through the exact same thing when I started my LLC last year. The key thing to remember is that for tax purposes, how your business is structured legally (LLC) and how it's treated for taxes can be two different things. Since you're a single-member LLC and haven't made any special tax elections, you're what the IRS calls a "disregarded entity" - meaning for tax purposes, you're treated just like a sole proprietor. So you'd check "Individual/sole proprietor or single-member LLC" on box 3. On the form, put your name on the "Name" line and your LLC business name on the "Business name/disregarded entity name" line. You can use either your SSN or your LLC's EIN (if you have one) - both are acceptable for single-member LLCs. Don't stress too much about it - you're definitely not alone in finding this confusing! The IRS could definitely make their forms clearer on this point.
0 coins
Diego Fisher
•This is really helpful, thanks! I was overthinking it way too much. One quick question - if I do have an EIN for my LLC, is there any advantage to using that instead of my SSN on the W9? I've heard some people say it's better for privacy reasons but wasn't sure if there are any downsides to consider.
0 coins