The W-9 you’ll need, and why

Before I say a word: I’m not a tax professional. I run a small company that pays people, and I’ve paid a preparer every year of my adult life. Take this as a neighbor explaining the shape of the thing, then confirm the details with a licensed preparer.

Here is what happens the first time somebody besides an employer pays you after 50.

What a W-9 actually is

A W-9 is a one-page IRS form, Request for Taxpayer Identification Number and Certification. That’s it. It’s not a tax return, and it doesn’t go to the IRS at all. You fill it out and hand it to the company paying you, and they keep it in a file.

It asks for your name, your address, and your Social Security number (or an EIN if you’ve set up a business). You sign to certify the number is yours.

The part that scares people is handing over a Social Security number, and that’s a fair instinct. Only give it to a company you’ve actually agreed to be paid by, send it by secure upload or mail rather than plain email, and never give it to anyone who contacts you out of the blue asking for it.

Why a company paying you needs it

The IRS requires a business to report what it pays to non-employees once those payments cross a threshold in a calendar year. For decades that threshold was $600. A 2025 law raised it to $2,000 starting with payments made in 2026, and your preparer will know where it sits in any given year. To report the payments, the business needs your taxpayer ID. Hence the W-9.

Most companies, including mine, ask for the W-9 before the first payment rather than waiting to see whether you’ll cross the line. If you’re a Fixity Ambassador, you’ll be asked for one before your first check is cut. That’s not a sign you owe anything. It’s the paperwork that lets us pay you.

The 1099-NEC, and what to do with it

If a company paid you enough to report, by the end of the following January they’ll send you a Form 1099-NEC. NEC stands for non-employee compensation. One copy goes to you, one goes to the IRS.

It shows one number: what they paid you. No taxes were withheld, because you’re not an employee. The money arrived whole, and the tax on it is yours to settle with your return.

Two things follow. First, set some aside as it comes in. Twenty to 30 percent is a reasonable rule of thumb, because you’ll owe income tax plus self-employment tax, which is Social Security and Medicare, both halves, since there’s no employer paying the other half. Second, if the side income is substantial, you may need to pay quarterly estimated taxes rather than one lump in April. A preparer can tell you whether you’ve crossed that line.

And note: you owe tax on the income whether or not a 1099 shows up. The reporting threshold is the company’s obligation, not the limit of yours.

Simple records that will save you in April

You don’t need software. You need a habit. Mine, for the first several years, was this:

• One checking account, or at least one envelope, for the side income. Deposits in, expenses out. Don’t mix it with the groceries.
• A one-page log: date, who paid, how much. A spiral notebook is fine. A spreadsheet is better.
• A shoebox or folder for every receipt that has anything to do with the income. Printer ink, a used laptop, the annual fee for a program, postage.
• Keep the 1099s and your W-9 copies in the year’s folder. Seven years is the common advice.

Ten minutes a week beats rebuilding a year from memory in March.

Home office and mileage, the basics

If part of your home is used regularly and exclusively for the income, a spare bedroom that’s now your office rather than the kitchen table you also eat at, you may be able to deduct a portion of your housing costs. The simplified method allows $5 per square foot up to 300 square feet, so $1,500 a year at most. The regularly-and-exclusively test is strict, and it’s where people get into trouble, so be honest about it.

Mileage: if you drive for the income, to a tutoring family’s house, to the post office for it, to buy supplies, those miles are deductible at the IRS standard rate, which was 70 cents a mile for 2025. Keep a log in the car: date, where, why, miles.

Neither is worth stretching. The deductions are modest, the penalties are not.

When to talk to a tax preparer

A few hundred dollars for the year, you can probably handle with whatever software you already use. Beyond that, these are my signals to pick up the phone: your first 1099-NEC arrives; the income crosses a few thousand a year; you’re considering the home office deduction; you’re drawing Social Security and earning on the side, because extra income can affect how much of your benefit is taxed and, before full retirement age, can reduce the benefit itself; you’re on a marketplace health plan, because income changes the subsidy; or a letter from the IRS confuses you.

A good preparer for a simple return with one 1099 runs a couple hundred dollars in most places. It is the one expense in this column I’d tell you not to skip.

I’m not a tax professional. But I’ve been on both sides of the W-9, and the only people it ever hurt were the ones who were afraid of it and ignored it. Fill it out, keep the shoebox, and call someone in February.