W-9 Collection Best Practices: A Guide for Business Owners

Collecting and managing W-9 forms may not be the most exciting part of running a business, but it’s one of the most important. A properly collected W-9 ensures that you have the correct taxpayer information for vendors, contractors, and freelancers — which makes year-end 1099 filing much smoother and keeps you compliant with IRS requirements.

As your accounting partner, we’ve put together a few best practices to help you stay organized and avoid common pitfalls.

1. Request W-9s Upfront

The best time to request a W-9 is before you pay a new vendor or contractor. Waiting until tax season often leads to delays, missing information, and a scramble to track people down. Make W-9 collection a standard part of your onboarding process for new payees.

2. Use Secure Methods

W-9 forms contain sensitive personal and business information, including Social Security Numbers or Employer Identification Numbers. Always collect and store these securely:

• Avoid email when possible, unless encrypted.

• Use secure portals or accounting software with built-in document collection features.

• Store forms in a password-protected, access-controlled system.

3. Double-Check for Accuracy

Simple errors can cause IRS mismatches and potential penalties. Review each W-9 to ensure:

• The name matches the taxpayer identification number (TIN)

• The form is signed and dated.

• The business classification box (individual, LLC, corporation, etc.) is checked correctly.

4. Keep Records Organized

Maintain a central, organized file of W-9s. Whether you store them electronically or in hard copy, make sure they’re easy to locate when it’s time to issue 1099s. Pro tip: label files by vendor name and year so you always know which version is current.

5. Update as Needed

A vendor’s tax information may change if they update their business structure or move to a new address. It’s a good idea to confirm W-9 details annually and request a new form if anything changes.

6. Don’t Overlook Exemptions

Some vendors (such as corporations) may not require a 1099, but it’s still best practice to request a W-9 from every payee. Having a completed form on file helps you avoid confusion later and keeps your records consistent.

Final Thoughts

By making W-9 collection a routine part of your vendor process, you’ll save yourself time, reduce stress during tax season, and avoid potential IRS penalties.

If you need help setting up a secure, streamlined process for collecting and managing W-9s, our team is here to help! We’ll make sure your records are complete, compliant, and ready when it’s time to file 1099s.