I am doing a cake for a company's Christmas party and they have requested I send a W-9 form with my invoice. Any accountant-bakers out there that can explain why they would need my SSN? My bakery is a sole-proprietorship, no employees. TIA if you can help!

I've never heard of such a thing! Ask them why they need it. It is my understanding that that can only be asked of those who are considered contract labor, or a child care provider...they are placing an order with your company, unless they are a food industry biz they shouldn't be asking for that info. I'm not a cpa but, that sounds a bit off to me. I wouldn't give it.

"A person who is required to file an information return with the
IRS must obtain your correct taxpayer identification number (TIN)
to report, for example, income paid to you, real estate
transactions, mortgage interest you paid, acquisition or
abandonment of secured property, cancellation of debt, or
contributions you made to an IRA."

This is straight from the W-9 form. They are asking for it simply because they are going to "write your cake off" as a business expense the same way they would if they were buying a box of pens for their staff to use.

Not sure if this makes you feel all warm and fuzzy yet,

I stamp and did several cards for my office and they paid me for them. To write off and show where their money went, they need it for tax purposes. I wasn't even a business and had to give them my SS#. Pretty standard, scary to give out SS#s but standard.

If you pay a company/vendor/individual, etc more than $600 per year and claim it as a business expense, you need their ssn/taxpayer id for tax purposes. no biggie! On your end, beware, they will send you and the IRS a 1099 at the end of the year so you need to claim the income.

stephaniescakenj

I just had to tell you that I love your pic of the cat with the lime? on its head. Although the cat doesn't looked please. It is just too funny.

I'm an Accountant...as others have stated here they want your FEIN (federal tax id #) or SS#, because they are going to submit a 1099 form to the IRS...much like you receive a payroll check and taxes get taken out, a 1099-vendor (which is what they are considering you) will receive payment, but no taxes will be taken out....they are expecting that you will be responsible for the taxes by claiming it as income at the end of the year. If your payments from the calendar year from them do not equal or exceed $600, you won't receive anything from them and they will not be submitting anything to the IRS, so no worries. If you've received $600 or more than you will have to claim their payments as income at the end of the tax year with the IRS. Technically 1099 vendors are considered those that are performing a service,(aside from real estate transactions), such as consulting. It seems that you are providing supplies, unless they are turning around and re-selling your cakes/cupcakes, which would not be subject to 1099. Many companies have a general rule to ask for W-9's for each vendor so they can decide who is subject at the end of the year and who is not. It's pretty standard practice...personally, I wouldn't worry too much about it.

stephaniescakenj

I just had to tell you that I love your pic of the cat with the lime? on its head. Although the cat doesn't looked please. It is just too funny.

If you have a legal business, it is a good idea to get a federal tax id for your business. It is easy to get on line and you never have to give out your ssn.

Everything said is above is correct. In CA, I have to ask every vendor and submit the sole-proprietorship to the state. This is one way to get the people who owe taxes and child support.