Question:

Help with W9 form?

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i am filling out a form W 9 and i need some help, How do i know what option do i pick....please help me

1) am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup witholding as a result of a failure to re port all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup witholding, and I am a U.S. person (including a U.S. resident alien).

2)I am subject to backup witholding, and I am a U.S. person (including a U.S. resident alien).

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  1. Normally it would be 1, unless you owe back taxes or have been notified by the IRS that withholding is required due to tax owed or underwithholding in the past.

    There is another selection about whether to select to exempt it from withholding.  If you would owe tax on the 1099 income anyway, you might as well let them withhold unless it is a small amount or you have it covered by other withholding.  Default withholding can vary from 10% to 28% depending what income source (20% from eligible retirement rollover).

    There may be an underwithholding penalty (with a few exceptions) if you owe $1000 more tax than any withholding at the end of each quarter (see Form 1040-ES).  And check any withholding or estimated tax laws for your state.


  2. Who are you filling out the W-9 for?

    Most likely you should check option 1.
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