united-states business tax-law irs
When do you need to request a W9?
<p>I know that a W9 is required when paying over $600 to a US individual or company that is your vendor. What I'm confused about is why you don't need to request a W9 if you walk into best buy and have Geek Squad fix a computer for $650. However, you do need to request a W9 if you hire someone to come paint your office.</p>

<p>What's the difference between these two things?</p>

<p>The key difference is that Best Buy is a corporation, and you are probably thinking of a painter who does not do business as a corporation.  (They might be a sole proprietor, for instance.)</p>
<p>As far as I know, the $600 rule isn't about Form W-9 itself.  Rather, the rule is that when your business pays more than $600 for services, you may be required to file <a href="https://www.irs.gov/instructions/i1099msc" rel="noreferrer">Form 1099-MISC</a>.  One of the boxes on that form asks for the recipient's Taxpayer Identification Number (TIN), so you have to get that from them somehow, and a common way (though not the only way) is to give them a Form W-9 and ask them to fill it out and return it to you.  Form W-9 also asks the recipient to state whether they are subject to backup withholding; if they are, or if they won't give you their TIN, then you have to withhold taxes from the payment and send it to the IRS, reporting this on the 1099-MISC as well.</p>
<p>Now, if you look at the section &quot;Exceptions&quot; on the 1099-MISC instructions:</p>
<blockquote>
<p>Payments for which a Form 1099-MISC is not required include all of the following.</p>
<p>Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations, later.</p>
</blockquote>
<p>Best Buy is a corporation, and none of the exceptions under &quot;Reportable payments to corporations&quot; apply when you are paying them for computer repair services.  Therefore, you do not have to file a 1099-MISC when you make such payments to Best Buy.  As such, you have no need to get their TIN, and therefore no need to ask them to fill out a W-9.</p>
