Compare the Difference Between Similar Terms

Difference Between

Home / Business / Finance / Tax / Difference Between W9 and 1099

Difference Between W9 and 1099

June 29, 2017 Posted by Dili

Key Difference – W9 vs 1099
 

Tax filing can often be confusing with an abundance of related paperwork that bears various names and identifiers. W9 and 1099 are such two forms used for tax filing under the regulations of Internal Revenue Service (IRS). The key difference between W9 and 1099 is that W9 is a form filed by third party companies such as independent contractors who provide services to companies, upon the request from the respective company whereas 1099 is a form used to provide information to the Internal Revenue Service (IRS) regarding specific types of income from non-employment related sources.

CONTENTS

1. Overview and Key Difference
2. What is W9
3. What is 1099
4. Side by Side Comparison – W9 vs 1099 in Tabular Form
5. Summary

What is W9?

W9 is a form filed by third party companies such as independent contractors who provide services to companies, upon the request from the respective company. Request for Taxpayer Identification Number and Certification Form is another name given to the W9 form. Three main sections can be seen in W9 form with the following components.

General Information

  • Name of the taxpayer
  • Business/entity name
  • Federal tax clarification (to indicate the type of the business)
  • Address and zip code

Taxpayer Identification Number (TIN)

TIN is a unique 11 digit numeric code issued for vendors and dealers who are liable to pay VAT (Value Added Tax).

Certification

In this section, the taxpayer certifies that the correct TIN is provided in the form.

W9 is an IRS form; however, this is not sent to the IRS, but is maintained by the individual who files the information return for verification purposes. W9 also serves as an important identification of the TIN of the taxpayer. Companies who obtain services from third parties has to request the W9 from a U.S. citizen or a foreign national. The information in this form becomes useful when the company is reporting to the Internal Revenue Service to indicate the amount of funds third party companies.

Form W9 PDF

Key Difference - W9 vs 1099

Figure 01: Form W9

What is 1099?

1099 is a form used to provide information to the (IRS) regarding specific types of income from non-employment related sources. A number of variations can be found in 1099 forms depending on the source of non-employment, where they are technically called information return since the objective of 1099 is to encourage taxpayers to reports all their means of income and pay taxes. Most commonly used types of 1099 are mentioned below.

  • 1099 MISC (Miscellaneous Income) – to be filed by independent contractors
  • 1099 DIV (Dividends and Distributions) – to be filed by owners of ordinary shares or mutual funds
  • 1099 INT (Interest Income) – to be filed by interest earners from a bank account
  • 1099 R (Sources of retirement) – to be filed by retirement income earners from annuities, insurance contracts, individual retirement accounts (IRA), and pensions

In general, 4 copies of 1099 has to be made; for the payer, payee, IRS and the State Tax Department. IRS also specifies regulations regarding filing tax return based on the number of 1099 forms. If the number of forms is less than 250, paper copies must be filed. When the number of forms exceeds 250, they must be filed electronically with the IRS.

Difference Between W9 and 1099

Figure 02: 1099 R should be filed by retirement income earners.

What is the Difference Between W9 and 1099?

W9 vs 1099

W9 is a form filed by third party companies such as independent contractors who provide services to companies, upon the request from the respective company 1099 is a form used to provide information to the Internal Revenue Service (IRS) regarding specific types of income from non-employment related sources.
 Variations
No variations are there in W9 form. Numerous variations are available in 1099 such as for dividends, interest income, and retirement.
Tax Correspondance with IRS
W9 is not sent to the IRS but is maintained by the individual who files the information return for verification purposes. form 1099 has to be filed with IRS.

Summary – W9 vs 1099

The difference between W9 and 1099 is that W9 is a form filed by third party companies such as independent contractors who provide services to companies while 1099 is a form used to provide information to the Internal Revenue Service (IRS) regarding specific types of income from non-employment related sources. However, both share largely similar aims where the IRS attempts to ensure that tax is collected from all types of incomes.

Download PDF Version of W9 vs 1099

You can download PDF version of this article and use it for offline purposes as per citation notes. Please download PDF version here Difference Between W9 and 1099.

References:

1. Fontinelle, Amy. “The Purpose Of 1099 Forms.” Investopedia. N.p., 25 Aug. 2014. Web. Available here. 23 June 2017.
2. “What is an IRS 1099 Form?” Intuit TurboTax. N.p., n.d. Web. Available here. 23 June 2017.
3. Perez, William. “What You Need to Know about Form W-9.” The Balance. N.p., n.d. Web. Available here. 22 June 2017.

Image Courtesy:

1.”Form W-9, 2005” By Unknown – (Public Domain) via Commons Wikimedia
2. “Form 1099-R, 2015” By United States Internal Revenue Service – irs.gov (Public Domain) via Commons Wikimedia

Related posts:

Difference Between I9 and W9Difference Between I9 and W9 Difference Between W2 W4 and W9Difference Between W2 W4 and W9 Difference Between Tax Return and Tax Refund Difference Between Duty and Tariff Difference Between PAN and TANDifference Between PAN and TAN

Filed Under: Tax Tagged With: 1099, 1099 Definition, 1099 Features, 1099 Purpose, Compare W9 and 1099, Form 1099, Form W9, Request for Taxpayer Identification Number and Certification Form, W9, W9 and 1099 Differences, W9 Definition, W9 Features, W9 Purpose, W9 vs 1099

About the Author: Dili

Dili has a professional qualification in Management and Financial Accounting. She has also completed her Master’s degree in Business administration. Her areas of interests include Research Methods, Marketing, Management Accounting and Financial Accounting, Fashion and Travel.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Request Article

Featured Posts

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and Cold Symptoms

Difference Between Coronavirus and SARS

Difference Between Coronavirus and SARS

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Influenza

Difference Between Coronavirus and Covid 19

Difference Between Coronavirus and Covid 19

You May Like

Difference Between 88 and 76 Keys Piano Keyboards

Difference Between Private Equity and Venture Capital

Difference Between Normal Edition and Special Edition Twilight Books

Difference Between MIPS and ARM

Difference Between MIPS and ARM

Difference Between Invasive and Non Invasive Breast Cancer

Latest Posts

  • What is the Difference Between BPPV and Cervical Vertigo
  • What is the Difference Between Transdermal and Intradermal
  • What is the Difference Between Seroma and Hematoma
  • What is the Difference Between Prostatitis and Urethritis
  • What is the Difference Between Cocoa Butter and Shea Butter
  • What is the Difference Between Eimeria and Isospora
  • Home
  • Vacancies
  • About
  • Request Article
  • Contact Us

Copyright © 2010-2018 Difference Between. All rights reserved. Terms of Use and Privacy Policy: Legal.