If you run a business that operates through a limited liability company, or LLC, you might need to use Form W-9 periodically. A business that has to file an information return to report certain payments it makes to your LLC may request a W-9 from you. You may also have to request W-9s from businesses and individuals such as independent contractors for the information returns the LLC is responsible for filing.

What the W-9 Is Used For

The Internal Revenue Service uses a wide range of information returns that report payments made through various types of business transactions. Common information returns include the 1099-MISC, used to report payments to independent contractors, and Form 1098, for banks to report mortgage interest payments to homeowners. But before businesses, including multi- and single-member LLCs, can prepare an information return, they all need the payment recipient to submit a W-9. Form W-9 is primarily needed to obtain the recipient's taxpayer identification number, or TIN, such as a business' employer identification number, or EIN, that the IRS requires to be entered on all information returns. Without a TIN, the IRS is unable to check whether a business is reporting the correct amount of taxable income.

When to Request W-9 Forms

Certain transactions indicate whether or not your LLC should request a W-9. For example, if the LLC uses independent contractors, a W-9 is needed for each contractor who receives annual payments from the LLC totaling $600 or more -- the minimum amount that will require the LLC to file a 1099-MISC for a contractor. The W-9s you receive are for the your business use only and it isn't necessary to file them with the IRS.

How to Fill out W-9s for the LLC

When the LLC is on the receiving end of a reportable payment, the payer may request a W-9 from you. If you're the sole member of the LLC and you haven't made an election for the business to be taxed as a C- or S-corporation, you'll enter your own name on the first “Name” line of the requested W-9 form and the LLC's legal name on the second “Business name” line. In this case, you'll then mark the “Individual/sole proprietor” box as the federal tax designation. For a multi-member LLC or a single-member LLC that's taxed as an S- or C-corporation, the business' legal name is entered on the “Name” line and the second line is left blank. All LLCs can enter an EIN in the TIN section of the W-9, though you can use your own Social Security number if it's a single-member LLC and you pay tax as a sole proprietor.

Certifying the W-9

The final section of the W-9 requires you to certify the accuracy of the information entered on the form. One of the statements you'll need to certify is that you or the LLC is exempt from backup withholding. Generally, the IRS will let you know if you're subject to backup withholding. If you aren't exempt, cross out the relevant statement in the certification section and sign the W-9 before submitting it to the requester.

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