W-9 & 1099 Tax Compliance

Capture W-9 Tax Forms, Send Contractor Payments, Deliver 1099s

Payment Rails accounts payable tax compliance platform streamlines the entire W-9 & 1099 process by digital tax form collection, validation, payouts and year-end tax reporting.

w-9 tax compliance on desktop
w-9 tax compliance on desktop
W-9 & 1099 Tax Compliance

Capture W-9 Tax Forms, Send Contractor Payments, Deliver 1099s

Payment Rails accounts payable tax compliance platform streamlines the entire W-9 & 1099 process by digital tax form collection, validation, payouts and year-end tax reporting.

Reduce Administrative Burden

Easy 1099 payments and tax compliance

Eliminate Errors

Eliminate the administrative burden of manually collecting tax form documents from recipients/suppliers via mail, scan or fax

Automate Calculations

Eliminate recipient errors and wasted time through use of an easy to complete guided tax form process

Avoid Penalties

Eliminate manual and complex tax withholding calculations

Work Digitally

Avoid hefty IRS tax penalties by staying compliant.

Scale Seamlessly

Go paperless with a fully digitized tax form collection and reporting solution in accordance to IRS requirements.

Never worry about taxes again

Make tax season a breeze
with Payment Rails

  • without payment rails tax compliance chart
  • without payment rails tax compliance chart

Powerful tax features

Everything you need for tax compliance.

Payment Rails automates and solves the manual and complex accounts payable and tax compliance process

  • Tax Form Collection

    W-9 form digitization

  • Payout Automation

    Streamlined payout processing

  • Reporting

    Automated year-end 1099 generation.

  • Document Storage

    Central hub to maintain completed tax forms for IRS audits

  • TIN Validation

    SSN, EIN & Name Controls

  • Intelligent Validation

    Dynamic form validation

  • E-Deliver Forms

    Automatically deliver electronic forms to your independent contractors.

  • Fast Integration

    Easy integration within minutes with our Recipient Widget

Frequently Asked Questions: W-9 & 1099 Tax Compliance

Who needs to complete a W-9 form?

Anyone who does work for a company but was not the actual employee of that company is required to fill out Form W-9 for every company for which they performed non-employee work. Form W-9 are known as “information reporting” federal income tax forms. Form W-9 is used in the U.S. when working as a freelancer or independent contractor. The company then uses the information you provide on the form to prepare Form 1099-MISC, reporting to the Internal Revenue Service the amount of income it paid to you or your company.

Who might be asked to fill out a form W-9? Freelancers, for one. Freelancers are brought in to perform work on projects that are short term. This involves work such as writing, research, or graphic design work. They aren’t needed full time, as the work will run out. Freelancers are required to fill out a W-9 form.

What Defines an Independent Contractor?

According to the IRS or Internal Revenue Service, you are eligible for a 1099-MISC when you work as an independent contractor and perform services for a company rather than being a direct employee. Generally, as an independent contractor, you have the right to control what you work on and how it will be done. Your client can only “control or direct only the result of the work.”

Here are some examples that may be considered independent contractors:

  • Driver for a ride sharing company
  • Freelance developer or graphic designer
  • Airbnb host
  • Social media consultant
  • General contractor
What if I do not collect a W-9 form?

If you have not collected a W-9 form from your contractor/vendor and did not issue the required 1099-Misc form, the IRS will hold you responsible for not withholding 28% tax on the amount paid and assess penalties for not issuing the required form. The penalties are $260 for each failure to file and an additional $260 for each failure to issue a required 1099 Form. The IRS is very serious about 1099’s being filed and in addition to the potential penalties for not filing, they can/will deny the deduction for that expense under audit. It is strongly recommended that you request a W-9 from all vendors you do business. This will allow you to accurately generate the required 1099’s and if you are ever audited, you can produce the W-9’s and show that you are in compliance.

What is a 1099-Misc Form?

The 1099-MISC form is used for business to report payments of $10 or more in gross royalties or $600 or more in compensations or rents to a person who is not an employee.

Disclaimer: These FAQ’s do not constitute legal or tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. You are responsible for consulting with your own professional tax advisors concerning specific tax circumstances.

Learn more about tax compliance

US Tax Compliance Frequently Asked Questions