If you’re a business owner operating as a single-member LLC, filling out a Form W-9 might seem straightforward, but it’s one of the most commonly misunderstood forms.
Here’s what you need to know to avoid costly mistakes.
A single-member LLC is considered a disregarded entity for tax purposes.
It means the LLC does not file its own separate tax return. Instead, all business activity is reported directly on the owner’s personal tax return.
From the IRS’s perspective, the LLC essentially doesn’t exist as a separate taxpayer.
Form W-9 is used to provide your taxpayer identification number (TIN) to someone who will be paying you.
Typically, this information is used to issue a Form 1099, which reports payments made to you during the year.
The IRS then matches:
If those numbers, or more importantly – the tax ID numbers, don’t match, it can trigger issues or notices.
Many single-member LLC owners make the mistake of using their LLC’s EIN when filling out a W-9.
However, according to IRS guidance, this is incorrect.
The correct tax ID depends on who ultimately owns the LLC:
The key rule: The W-9 should reflect the tax ID that appears on the owner’s tax return, not the LLC’s EIN.
The IRS is very clear, especially in the latest draft instructions for Form W-9, that you should not use the EIN of a disregarded entity.
Because the LLC is disregarded for tax purposes, the IRS “looks through” it and matches income to the actual taxpayer.
Using the wrong tax ID can lead to:
Even if your single-member LLC has its own EIN, that’s not what belongs on your W-9 in most cases.
Always report the tax ID of the ultimate taxpayer, the person or entity that actually files the tax return.
When in doubt, it’s worth confirming with your tax advisor to ensure everything is reported correctly.
Associate Partner
Julie has over 20 years of experience in public and private accounting, representing varied clientele including the medical, legal, and real estate industries and trusts.
View Julie's Bio →
