Introducing Static Vendor Request Links: Streamlining W-9 Collection for Efficient Vendor Payments
New Feature
Refractional CFO has introduced a new feature called Static Vendor Request Links. This feature simplifies the process of collecting tax information from new vendors.
Traditionally, you would have to ask vendors for their W9 form (which contains essential tax information) after you've made a payment to them. This can be a hassle if the vendor is unresponsive or slow to provide the information.
With the Static Vendor Request Links feature, you can request a vendor's W9 before making any payments. The link you provide to the vendor allows them to fill out their W9 form online. You'll be notified when the vendor submits their form, giving you the green light to proceed with the payment.
This proactive approach helps you avoid potential tax issues (like 1099 problems) that can arise if a vendor fails to provide their W9 in a timely manner.
The Static Vendor Request Link is unique to your organization and will be added to the "Resources" tab on your portal for easy access.
https://portal.refractionalcfo.com/client-login
The best part is that this feature is included in your current plan with Refractional CFO, meaning there are no additional charges for using it.
This is a great tool to make tax compliance and vendor payments more efficient and less stressful!
What is IRS Form W-9?
Form W-9 (Request for Taxpayer Identification Number and Certification) is a key document in the United States tax system, especially when it comes to payments made to independent contractors and certain other payees. Here are a few reasons why it's crucial to collect W-9s:
Tax Reporting: Businesses need to report certain payments they make to the IRS, and the information on a W-9 helps them do this correctly.
Independent Contractors: If you pay an independent contractor $600 or more during the year, you'll need to report this to the IRS using Form 1099-NEC. You'll use the information from the W-9 to complete the 1099-NEC.
Backup Withholding: The IRS requires businesses to withhold income taxes from certain payments if the payee does not provide a correct taxpayer identification number (TIN). Having a W-9 helps ensure that you don't need to do backup withholding.
Identity Verification: Collecting a W-9 can help verify the identity of your vendors. The form includes the vendor's legal name, business name (if different), business entity type, and their taxpayer identification number, such as a social security number (SSN) or employer identification number (EIN).
Legal Requirement: Lastly, it's a legal requirement. Failing to collect and maintain W-9 forms or handle backup withholding when required can lead to penalties from the IRS.
To make sure all these steps are followed, many practices have a policy to collect a W-9 form before making a payment. That way, they ensure they have the necessary information when it's time to prepare 1099s or deal with other tax issues.
