When you think about tax season, do lawyers and W9 forms come to mind? For many small business owners, they should. If your business paid for legal services in 2024, you might be eligible for a valuable tax deduction—but only if you follow the proper steps now.
Here’s why asking your lawyer for a W9 form is a smart move and how it can help you save money come tax time.
What Is a W9 Form?
The W9 form, also known as the Request for Taxpayer Identification Number and Certification, is a document that provides basic taxpayer information. It’s typically used by businesses to collect details like a professional’s legal name, address, and Taxpayer Identification Number (TIN), which is often their Social Security Number (SSN) or Employer Identification Number (EIN).
For business owners, the W9 form ensures accurate record-keeping for services rendered and helps streamline tax reporting—particularly when payments to service providers meet or exceed $600 in a given year.
Why Should You Ask Your Lawyer for a W9?
There are two key reasons why requesting a W9 form from your lawyer is essential for your business:
1. Tax Compliance
The IRS requires businesses to report payments made to independent contractors or service providers (including lawyers) using a Form 1099-NEC if the total payment is $600 or more over the course of the year. The W9 form helps you gather the information needed to fill out this 1099 form accurately. Without it, you risk mistakes or omissions in your tax filings, which can lead to penalties or audits.
2. Tax Deductions for Legal Services
Did your business spend money on legal services in 2024? Good news! Many legal expenses are considered deductible under IRS rules. This means you can reduce your taxable income by the amount you spent. However, you’ll need the proper documentation, including proof of payment and a completed W9 form from your lawyer, to claim the deduction.
What Types of Legal Fees Are Tax Deductible?
Not all legal expenses qualify as tax deductions. Here are some examples of deductible legal fees for business owners:
- Fees related to business formation, like setting up an LLC or corporation
- Drafting or reviewing contracts
- Representation in business-related disputes
- Guidance on regulatory compliance
- Assistance with employment issues, like drafting employee agreements
However, personal legal expenses—like drafting a will or handling a divorce—are generally not deductible, even for business owners.
How Do You Request a W9 Form from Your Lawyer?
Unsure how to make the request? Don’t worry; it’s simple.
- Reach Out Early: Contact your lawyer or their billing department and explain that you need their W9 form for tax purposes. Doing this early ensures you’ll have the information ready well before tax season heats up.
- Provide a Template: If your lawyer isn’t familiar with the process, offer to provide a blank W9 form (available on the IRS website) for them to fill out.
- Be Professional: Keep your request brief and professional. Most lawyers are accustomed to these types of requests and will quickly provide the form.
Pro Tips for Small Business Owners
- Keep Accurate Records: Along with the W9 form and proof of payment, maintain a detailed record of what services your lawyer provided and why they were necessary for your business.
- Consult Your Tax Professional: Tax laws can be tricky. Work with an accountant or tax advisor to ensure you file everything correctly and take full advantage of deductions available to your business.
- Think Ahead for 2025: Make it a habit to request W9 forms from any service provider you pay $600 or more—including lawyers—at the start of your working relationship to avoid scrambling during tax season.
Why It Pays to Be Proactive
Tax reporting and deductions don’t have to be overwhelming, especially when you arm yourself with the right tools and documents. Asking your lawyer for a W9 form is a small but crucial step that can save you time, stress, and money when filing your taxes. Plus, the potential tax deductions for legal services could be a significant benefit for your bottom line.
Wrapping Up
If you’ve paid for legal services in 2024, don’t wait to request a W9 form from your lawyer. It’s a straightforward way to stay compliant with IRS regulations and unlock valuable tax deductions for your business. Take this step today, and you’ll thank yourself come tax time.
Got questions about handling W9 forms or maximizing your tax deductions? Schedule a consultation today with a Tax Attorney to learn more.
When you think about tax season, do lawyers and W9 forms come to mind? For many small business owners, they should. If your business paid for legal services in 2024, you might be eligible for a valuable tax deduction—but only if you follow the proper steps now.
Here’s why asking your lawyer for a W9 form is a smart move and how it can help you save money come tax time.
Law 4 Small Business® (L4SB®). A Slingshot company. A little law now can save a lot later®.