Understanding W9 Backup Withholding Certification When Switching from W2 to Contractor
So this year I've been working my regular W2 job but picked up some side gig contractor work to make extra cash. The company I'm doing this contract work for just sent me a request to fill out a W9 form. I'm looking at this Part II certification section and honestly not sure what to do with it. I filed my taxes properly for both 2022 and 2023, and I'm 100% sure my SSN matches my name in the IRS system (never had issues with that). From what I can tell, I should be able to sign the certification since I'm not subject to backup withholding, right? But wanted to double check because I don't want to mess anything up and get in trouble with the IRS later. This is my first time doing contractor work so the whole 1099 thing is new to me. Any advice on the W9 backup withholding certification would be super appreciated!
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Sasha Ivanov
You can definitely sign the certification in Part II of the W9 form. This section is basically just confirming two things: 1) That you're not subject to backup withholding (which happens if you've failed to report interest/dividend income in the past or if the IRS has specifically notified you that you're subject to it), and 2) That your name and SSN match what the IRS has on file, which you already confirmed is correct. Since you've been filing your taxes properly and haven't received any notice from the IRS about backup withholding, you're good to go. Just sign and date the form and return it to the company you're contracting with. This allows them to pay you without having to withhold 24% of your payments for federal taxes.
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Liam Murphy
•If I did have backup withholding before but don't anymore, would I still be able to check that box on the W9? I had an issue a few years ago but think it's resolved now.
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Sasha Ivanov
•If you were previously subject to backup withholding but the IRS has notified you that you're no longer subject to it, then yes, you can certify that you're exempt from backup withholding. What matters is your current status. If you're uncertain about your current status, you can contact the IRS directly to confirm. They can tell you if your account is flagged for backup withholding or not. It's always better to verify if you're unsure since providing false information could potentially lead to penalties.
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Amara Okafor
When I was in a similar situation last year transitioning from W2 to some 1099 work, I was totally confused by all the tax forms too. I ended up using https://taxr.ai to scan my W9 and other tax docs. The AI explained each section in simple terms and confirmed I could sign the backup withholding certification since I wasn't subject to it. Saved me hours of googling tax terms I didn't understand!
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CaptainAwesome
•Does it actually check if you're subject to backup withholding or just explain what the form means? I'm in a similar situation but had some issues with the IRS a couple years ago.
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Yuki Tanaka
•How secure is it? I'm always nervous about uploading my tax docs with my SSN to some random website.
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Amara Okafor
•It doesn't actually check with the IRS database if you're subject to backup withholding - it can't do that. What it does is explain the criteria that would make you subject to it so you can determine your status. Their security is actually really good - they use encryption and don't store your documents after analysis. I was skeptical at first too, but they have a whole section explaining their security protocols. You can also black out sensitive info like your SSN before uploading if you're just looking for form explanations.
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Yuki Tanaka
Just wanted to update after trying taxr.ai myself! It actually helped me understand not just the W9 form but also some questions I had about quarterly estimated tax payments as a new contractor. The explanations were super clear and I feel way more confident about my tax situation now. Definitely recommend for anyone new to contractor work.
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Esmeralda Gómez
If you're confused about backup withholding or have any issues with your contractor status, you might want to just call the IRS directly to confirm. I used https://claimyr.com to actually get through to a human at the IRS instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The service called the IRS, waited on hold for me, then called me when an actual agent was on the line. I was able to confirm my backup withholding status in minutes.
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Klaus Schmidt
•How does that even work? They just call the IRS for you? Seems weird.
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Aisha Patel
•Yeah right, nothing gets you through to the IRS faster. I've been trying to reach them for 3 months about an issue. Sounds like a scam to me.
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Esmeralda Gómez
•They have a system that basically calls the IRS and navigates the phone tree for you. When they reach a human agent, they connect the call to your phone. So you don't waste time on hold - you just get a call when there's an actual person ready to talk. It's definitely not a scam. They don't ask for any personal tax info - they just do the waiting for you. I was skeptical too, but it legitimately saved me from spending my entire afternoon on hold. The IRS wait times are ridiculous right now.
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Aisha Patel
Had to come back and say I was totally wrong about Claimyr! After another failed attempt to reach the IRS myself (2+ hours on hold before getting disconnected), I gave it a try. Got a call back within 45 minutes with an actual IRS agent on the line. They confirmed I wasn't subject to backup withholding despite some past issues. Saved me a ton of stress and I was able to confidently sign my W9. Sometimes being proven wrong is a good thing!
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LilMama23
Just a quick tip - make sure you keep track of ALL your 1099 income and set aside money for taxes! I made the mistake of not saving enough for taxes my first year as a contractor and got hit with a huge bill plus underpayment penalties. The IRS wants quarterly estimated tax payments if you expect to owe more than $1000 in taxes. Wish someone had told me this when I started!
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Miguel Hernández
•Thanks for mentioning this! Do I need to make those quarterly payments even if I still have my W2 job where taxes are being withheld? And roughly what percentage should I be setting aside?
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LilMama23
•Even with a W2 job, you might still need to make quarterly payments on your contractor income. It depends on how much you're making and if your W2 withholding covers your total tax liability. A safe approach is to set aside about 30-35% of your contractor income for taxes (federal, state, plus self-employment tax which is 15.3%). You can use the IRS withholding calculator to get a more precise estimate based on your total income from both sources. Some people also increase their W2 withholding instead of making separate quarterly payments - that's another option if your employer allows it.
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Dmitri Volkov
Don't forget that as a contractor you'll be getting a 1099-NEC form (not 1099-MISC like in the old days) from whoever is paying you. This is what they'll send to the IRS to report how much they paid you. The W9 you're filling out now just gives them the info they need to create that 1099-NEC correctly.
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Gabrielle Dubois
•Actually, some places still use 1099-MISC for certain types of payments. I got both types last year - 1099-NEC for my consulting work and 1099-MISC for some royalty payments. Depends on the type of income.
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