How to Fill Out a W-9 for a Single Member Limited Liability Company
The Single Member Limited Liability Company (LLC) operates much like a sole proprietor. The major difference and benefit is the ability to separate personal assets from business assets. The business absorbs liability and your personal assets are off limits from lawsuits, collections and liability issues.
The business model is also known as a pass-through because you can simply pass profits from your business account to a personal account. Taxes and accounting methods for a single member LLC are similar to a sole proprietor, as well.
The W9 is an IRS document that helps track earnings and expenditures. The form is common for businesses that utilize independent contractors. It acts as a kind of replacement for employee payroll methods.
A single member LLC can use the W9 to hire contractors or to work as a contractor and receive earnings. As an employer, you will have the contractors fill out a W9 and will keep those records for IRS reporting. As a contractor, you will fill out the W9 and submit it to the businesses utilizing your services.
Write your name and business name on lines 1 and 2. A single-member LLC can use the personal name as the business name. Only fill out the second line if your business name is different from your personal name. This is clearly stated on the form.
Select the box for Individual/Sole Proprietor or Single Member LLC. If you have more than one member or you file taxes as a corporation, check the appropriate box. The single member LLC is considered a disregarded entity by the IRS. This means the tax status for the LLC is passed to the individual.
Box 4 is confusing for some people. Unless you have exemptions or FATCA reporting, simply skip this step. F
ATCA applies to businesses that have significant foreign holdings. The majority of folks will skip this one. If you are unsure, consult an accountant or tax specialist.
Boxes 5 and 6 are simply your address. Use the address listed under your LLC business license.
Box 7 asks about an account number and is optional. Unless you have a specific account number to share with your employer, skip this step.
Fill in your Social Security Number, unless you have a Taxpayer Identification Number (TIN).
Some single member LLC's will operate off their Social Security Number, whereas others obtain an EIN. EIN use is common for retailers and re-sellers of goods and services.
Finally, sign and date the document. Keep a copy for yourself, if desired, and submit the form to your hiring agent.