As a business owner, if you undergo a change in your legal entity status from a sole proprietor to an LLC taxed as an S Corp, it's important to update your clients with this change and provide them with an updated W-9 form that reflects your new business structure. By ensuring that your clients have the most up-to-date and accurate W-9 form associated with your business, you can help maintain smooth and consistent tax reporting across the board.
The reason for this is that the W-9 form requests information regarding your legal entity status, and it's essential to accurately reflect this information to prevent any confusion or discrepancies when it comes to tax reporting for you and your clients.
When you make this change, you should inform your clients about the transition and provide them with an updated W-9 form that reflects your new business structure. This way, when they report payments made to your business for tax purposes, they can accurately report it under the appropriate legal entity status.
Collective provides all members with an up-to-date W-9 for their business. Simply log in to your Dashboard and a copy can be found under the Documents>Company Documents section.
Remember, any significant changes to your business structure should be communicated to your clients and reflected in the appropriate documentation, such as the W-9 form, to ensure compliance and avoid any potential confusion in the future.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.