Why You Should Always Collect a W-9 Before Paying a Contractor
A simple business habit that saves you from end-of-year chaos. Most businesses don’t think about contractor paperwork until tax season rolls around and suddenly everyone’s scrambling like it’s the final round of The Amazing Race: 1099 Edition . And every year, we see the same pattern: great businesses, smart owners, and absolutely zero W-9s on file for half the people they paid. As a bookkeeping firm, we can confidently say this is one of the easiest problems to fix—and one of the biggest stress-reducers you can build into your operations. Collecting a W-9 before you pay a contractor their first dollar is one of those deceptively simple steps that completely changes how smooth your financial processes feel at year-end. Let’s break down why this tiny habit matters so much. What a W-9 Actually Does (Besides Ruining People’s Day If You Ask Too Late) A W-9 gives you the contractor’s legal name, tax classification, and taxpayer identification number (TIN). In plain English: it tells ...