Am I Filing My 1099s (or My W-9) Correctly?

You did what you're supposed to do. You hired some contractors, you collected W9 forms, and you're trying to file the right forms.Or maybe you're on the other side of this and someone just handed you that W9 form and you're like, ralph, I got no idea what to do with this. And right now you're trying to figure out 1099s W9s.You're thinking in terms of names and LLCs and EINs, and you're like, what if this all goes wrong? Well, today I'm going to help you slow down. Going to be check what matters and understand what happens if something doesn't match.Because you don't need panic. You need a process. And that's exactly what I'm going to give you on today's show. Hello and welcome to Financially Confident Christian.Now, today is an interesting type of episode. This is not one we usually handle. This is more suited towards the business person either hiring a contractor or maybe you're a contractor yourself.This we just got out of 1099. Season tax filing is over.But this is one of those things a lot of people struggle with because maybe you're staring at a W9 and you're wondering, how do I even fill this out? Ralph, you're worried about if you got to send these in, will the IRS reject these and give you penalties?And we're also going to talk about how to handle this as a freelancer if you're working as a side gig. Now, before we get into today's listener question, if you've got a question for this show, I would love to hear it.You can submit a question by going to financiallyconfidentchristian.com/question We'll put a link in the show notes, but again, that's financially confidentchristian.com? Let's get today's listener question. This narrates this.Hi, Ralph. I. I'm a sole proprietor and I hired three contractors last year. This is my first time filling out 1099s, and I'm pretty nervous about messing it up.I got W9s from all of them, but now I'm looking at the forms and I'm realizing I have no idea if the information is actually correct. One contractor put their LLC name on the form, but I don't know if the IRS has them registered as an LLC or as an individual.Another one's a corporation and their ein doesn't match what I thought ein's look like. If I file these and the IRS rejects them, what Happens? Do I get penalized on top of having to fix it?And is there a way to verify the names and the identification numbers actually match IRS records before I submit? Or do you just file and hope everything is right? I'd rather get this right the first time. Any guidance would help. Thank you.Like I said, this is a more intricate question generally suited towards business people today. So if you're not a business owner, I'm going to give you the excuse.You can pass this episode if you want to, but as a business owner or as a person that is acting as a contractor, you're responsible for this stuff. You're responsible for collecting the correct information. You're responsible for filing it on time.And you're also responsible for fixing any problems as they come up, not for guessing what someone meant to Write on that W9 form. Let's get into the details, what the W9 form actually does, because you might be listening to this right now.You're like, ralph, I don't even know what a W9 is. You might know what a W2 is. Maybe you've worked for somebody. A W9 is nothing more than a certification.On a W9, a contractor is attesting to their name, to their identification number and the tax classification that they're using. You use it to decide if a 1099 is required and what goes on it. Now, it's not your job to know how they're registered with the state or the irs.This is why you're giving them this form. You're asking them, hey, what does your registration look like?Your job is to request the W9 check to make sure there's no obvious gaps and file it based on what they gave you. Now, let's talk about obvious gaps. If there's no name on the form, ding, ding, ding, that's not going to work.If they haven't given you an identification number, ding, ding, ding, that's not going to work. If they haven't classified their business, that's not going to work. And if it's not complete, that's not going to work.So give it the old eyeball test. My grandmother used to say, let's put some eyeballs on this. If something looks off, don't make a federal case about it.Just ask them to confirm it or correct it. You don't have an obligation to investigate it. You just have to do what's called due diligence. Now, two things that look wrong but usually aren't.This is the thing that trips up a lot of my small business Clients, let's start with LLC names. This is the most common 1099 headache. Single Member LLCs is often called what's called a disregarded entity by the irs.They match the identification number to the owner's legal name, not the LLC name. That's why I said that a little while ago. If you get a 1090 or W9 form and you're like, why did they put an LLC name?But then they say they're a sole proprietor, the W9 Line 1 should be whatever the tax return name is going to be. If they're a single member LLC, that should be their personal name.Now, on the second line of the W9, that's where they can put the business name in which or a disregarded entity name only on an LLC name on line one with no legal name could be a mismatch risk. So listen, it's not complicated. Ask the contractor, can you confirm the correct tax name on line one and your identification number?You don't have to accuse them, just a chance to correct it before filing. When we get that W9 back, keep both files, but file the corrected one.Now let's talk about EIN numbers and corporations, because this fouls up a lot of people. People understand what a Social Security number is. An EIN is something different.An EIN is something that the IRS assigns to an entity, but it doesn't tell you anything about the type of entity. So if it looks like a funny number, don't just say, well, this can't be right.The real question is, do you need to issue this corporation a 1099 at all? Many corporate payments are actually exempt from 1099 filing. Attorney payments usually are required.Medical, health care payments are usually required. But check those things and make sure you understand what you're doing. Good records aren't there to burden you. They're there to protect you now.So you've collected the information, you've given it the grandma eyeball test. So verify before you file. And if you don't do that, here's what happens. Let's talk about verification.First, you can check the name and the identification number against IRS records before submitting. It's really simple. You can go out to the IRIS website and you can sign up for E Services.E Services allows you to put in a match to make sure it works. A lot of 1099 companies do this. You can ask the contractor to confirm it or hey, hire somebody like me, work with an accountant.You can't just have hope that it works, right? You got to verify. You got to ask and document. Now you go do all those things and you might still get a letter from the irs. There's a mismatch.Filing it wrong doesn't mean immediate penalty. That's not how this works. A mismatch usually triggers an IRS what's called a CP 2100 notice.And they're just telling you, hey, there could be an issue here. They might send you another notice. They might request a corrected W9.They might even tell you, hey, this person needs to have some money withheld from their payments. But those penalties you asked about, they depend on if you're doing things in a reasonable manner, if you're putting good faith into that.That's why I've said from the beginning, documentation is your protection. So have that W9 copy. If you've got any emails back and forth, prove that you filed on time and notes on any non response of this.Not trying to be perfect, you're trying to be responsible. Because you got to build a system that works when willpower won't. Now let's flip the script here because we've talked a lot about the business owner.Let's talk about you maybe being asked to fill out one of these W9 forms. Again, a W9 is just requesting your tax info. It wants your legal name, your address, your Social Security number.If you're a corporation or an llc, maybe you have an EIN number and a tax classification. It lets whoever's paying you report that income to the irs. That's the whole point. Here's the thing.A lot of people don't realize you don't have to be a quote business. It applies anytime you're paid as an individual, not an employee. So this isn't a W2 thing. No withholding.Anytime somebody pays you that you're not an employee, things like freelance or gig work, maybe you do some consulting, maybe you're lucky enough to get some speaking fees or maybe you do some side photography or tutoring. Maybe you drive people Uber and Lyft do these. Maybe you've done some home repairs for people. And here's what a lot of people don't think about.Maybe you want a prize or you want some award money. Anytime somebody pays you more than $600 in a year, the payer is required to report it via 1099 form. That's what they're asking for.Getting asked for one isn't some red flag, it's the payer doing their job. So if you're just an individual, if you're filling out one of these W9 forms, just write your name on it.Put your home address and your Social Security number. Unless you've got that ein number, you can leave the business name and exemption lines blank. If you're not registered as a business. And then simple.Sign it, send it back, keep a copy. You're responsible for that income whether you get a 1099 or not. That W9 doesn't mean you've become a business.It just means someone's keeping good records. I know there's a lot to cover here today, but there's also a spiritual side to this we shouldn't miss.We tend to think faithfulness shows up in big moments. Those generosity moments, those sacrifice moments, those life changing decisions. And of course those things matter.But faithfulness also shows up in those quiet details. That form you review. The contractor, you pay properly, the records that you keep, the honest questions you ask yourself when something looks off.Friend, God cares about integrity in the small things because those small things shape how we live. This isn't about fearing the irs. It's about handling responsibility with care. And if you make a mistake, that doesn't mean you're a failure.It just means you correct it, you learn from it, and you build a better process next time. Having faith doesn't move responsibility, but it does give you the courage to face it calmly. And I just want to reinforce this.You're not behind because you have questions. Having questions is great. You're actually growing because you're asking them before you file it. So here's your win for today.Go and collect those W9s so that you're ahead of the game. I have so many clients I just want to battle with every year. I was like, just get the W9s for us.A lot of business owners skip this and they scramble later. Pull out those W9s, make sure they look correct.And then if you've got any question, just send that to the contractor and say, hey, I got to understand this. And if you've got a complete one, do it in a timely fashion. Get it back to that person with all your information.That one small step can protect you later. And that's how responsibility becomes a habit. Now let's get to our Bible verse for today. And this one's all about integrity.It comes to us from Proverbs, chapter 10, verse 9. It says, Whoever walks in integrity walks securely, but whoever takes crooked paths will be found out. And listen, this.This verse isn't meant to scare you, but it's a reminder that integrity breeds steadiness. So in all things Tell the truth, keep those good records, ask the right questions and correct those mistakes.That's how you walk, with a steadier heart. Let's pray together right now. Lord. I want to pray for the business owner listening right now who's nervous about getting this wrong.Just give them peace as they review these forms, Lord. Give them wisdom to ask good questions and give them humility to correct what needs correcting.Remind them always that responsible stewardship isn't about protection. It's about faithfulness. And help them build those systems that bring order instead of stress. And treat contractors with honesty and integrity.And when fear speaks louder than the truth, Lord, remind that you're with them in the details, too. And we ask this in Jesus name. Amen. Friend, before you file, you've already done the hardest part.You've asked the right questions and you're learning the rules. That's the kind of business owner contactors trust and the IRS respects.So today's big takeaway is check those W9s, send messages if you don't have them. Keep copies, file on time and keep those good records. That's for your protection, not your burden.And if you've got a question, hey, it might be a business question, personal finance question. I'd love to hear from you. You can actually send me a voicemail. You can go to financiallyconfidentchristian.com/voicemail. It's super simple.We'll put a link in the show notes. Just click on that button. Record your message again. That's financially confidentchristian.com/voicemail. Well, thank you so much for joining me today.I know we got into more of a business discussion today, but there's a lot of people that are in the side hustle and the side gig businesses. And that's why I thought it'd be so easy, important for today. May God bless you and you have a great day today.