Filling Out a W9 For a Nonprofit: All You Need To Know
Filling Out a W9 For a Nonprofit: All You Need To Know
Running a successful non-profit can be a rewarding experience, but it also carries with it various responsibilities. One of the most important of these is filing out a W-9 for the organization each year. A W-9 is an IRS form that allows organizations to report their federal tax information and provide information about their employees or contractors.
Getting your head around the W-9 form can be a bit daunting - but fortunately for you, we have put together a step-by-step guide to make the process as easy and stress-free as possible.
What Is A W9 Form?
Before we dive into the details of filling out the W9 form, it's important to understand exactly what it is. A type of tax return, the W-9 is an official IRS form used when a business has a need to obtain a Taxpayer Identification Number (TIN) for either an employee or contractor, to whom they have paid over $600. The TIN is used to report earnings to the IRS and is required for tax filing purposes. This is one of the most popular forms, but it can be tricky if this is your first time filing.
When it comes to nonprofits, the W-9 form is used to report annual contributions, grant payments, and payments made to contractors.
When Might You Need To Fill Out A W9 Form As A Nonprofit Corporation?
There are two main scenarios in which a nonprofit corporation might need to fill out a W-9 form:
1. You Are Paid By Someone Else
If you run a nonprofit and you are paid money by someone else (such as a donor, grantor, or other independent contractor), then the person paying you will need to have your Taxpayer Identification Number. This is where the W-9 form comes in.
2. You Pay Someone Else
The second scenario is when you are responsible for paying someone else (such as a contractor or employee). In this case, it is your responsibility to obtain the Taxpayer Identification Number of the person you are paying. Again, that's where the W-9 form comes in. For example, say you hire a freelance graphic designer for your nonprofit organization. As part of the payment process, you need to obtain the freelancer's Taxpayer Identification Number, and this is done by having them fill out a W-9 form.
Why Is It Important To File A W9 Form?
There are a number of reasons that a W9 form is so important for nonprofits, and these include:
It Allows The IRS To Monitor Taxes
The W9 form is used by the IRS to monitor taxes for nonprofits. It ensures that all taxes are accounted for properly and that the organization is not engaging in any illegal activities.
It Helps Organizations With Tax Deductions
Nonprofit's can also enjoy the tax pros that come with a W9 form, as organizations can use the information to calculate their tax deductions each year. This helps them save money and keep more of their donations.
It Ensures Proper Records Keeping And Up To Date Information
The W9 form also helps organizations keep good records of their income and financial information and ensure that all payments are properly accounted for. This is especially important when it comes to filing taxes each year.
It Lets Your Nonprofit Access A Taxpayer Identification Number
As we mentioned, perhaps the most important reason for a nonprofit to fill out a w9 is to obtain a Taxpayer Identification Number (TIN) from a third party.
What Information Is Needed To Complete A W9 Form?
Filling out the W-9 is not an overly complicated task - all you need is basic information about yourself, your services and your organization. The following items must be included when filling out the form:
• Business name
• Employer identification number (EIN)
• Business address
• Type of legal entity
• Contact name and phone number
How To Fill Out A W9 For Non-Profit Organizations
The first step to filling out a W9 for non-profit organizations is to get a copy of the form. You can get this from the IRS website or by calling the toll-free number listed on the form, and it is also a good idea to download a copy of the instructions form at the same time - this will give you a great overview before you get started. Once you have the form, there are a few basic steps that you need to follow:
1. Provide The Name Of Your Corporation
The first step is to enter the name of your nonprofit corporation corporation in the “Name” field. Make sure to use the same legal name that appears on your corporate documents, such as the Articles of Incorporation.
2. Provide Your Business Name
Step two is to enter your business name in the “Business Name” field. This is typically the same as the corporation name but may be different if you are using a Doing Business As (DBA) name.
3. Understand Your Entity Type
The next step is to select the type of entity you are. This can be either a Sole Proprietorship, Partnership, Corporation, or LLC, but nonprofits will usually come under the "Corporation" box, and so you will need to check the "C Corporation" box. Alternatively, check the "Other" option, and type "Nonprofit" in the available box.
4. Enter Your Exempt Payee Code
Once you have selected the entity type, you will need to enter your exempt payee code. This is usually "EXEMPT" for a non-profit, but it can also be "01," "02," or "03."
5. Provide Your Street Address
Next, enter your street address. This is the address of the non-profit organization and should be a physical address that can be used for mailing purposes.
6. Provide Your City, State And ZIP Code
The last step is to enter your city, state, and ZIP code. This should be the same as the physical address provided in step five.
7. Add Any Account Numbers (Optional)
At this stage, you have the option to add any account numbers that may be associated with the charitable organization. This is not required, but if there are any, they should be entered in the appropriate fields.
8. Provide Your Taxpayer Identification Number (TIN)
Finally, you will need to provide your Taxpayer Identification Number (TIN). This is a ten-digit number that identifies the organization for tax purposes, and it is usually found on the Articles of Incorporation or other related documents.
9. Certify Your Information
Once all the required information is entered, you will need to sign and date the form. This certifies that all of the information provided is accurate and true.
10. Submit The Form
Once the form is completed and certified, it should be sent to the requesting organization. This is typically done either electronically or through the mail. It is important to keep a copy of the form for your records.
Top Tips For Filling Out Your W9 Form
Filling out your W9 form correctly is an important step when it comes to filing taxes as a non-profit organization. Here are some top tips to ensure you get it right:
- Follow The Instructions
Understanding organization tax can be complicated, so make sure that you follow the instructions carefully. It can help to download and read through these before you get started to give you a clear overview and make the process easier.
- Take Your Time
One of the most important tips is to take your time - tempting as it may be, don't be in a rush to file. Carefully read through the form and ensure all of the information you are providing is accurate - and only file when you are one hundred percent happy with the result!
- Double Check Your Information
Make sure to double-check your information before you fill in and file the form. This will minimize any chances of errors which could lead to a delay in processing or having to resubmit the form.
- Keep A Copy For Your Records
Finally, make sure to keep a copy of the form for your records. This will be helpful if you ever need to reference it or use it for any other purpose.
Filling out a W9 form for a non-profit organization can seem like a daunting task. However, by taking your time and double-checking the information you enter before you fill out the form, you can ensure that the file process is hassle-free, and keep your nonprofit in compliance with tax regulations.