Free tool
W-9 / W-8 exposure calculator
You paid contractors without collecting a W-9 or W-8. Enter how many and roughly how much, and see what the IRS can assess against you, the payer. The numbers update as you type.
Estimate for planning, not tax advice. Figures are federal only and use TY2025 penalty amounts.
Your estimated exposure
$9,480 – $12,480
Low end assumes ordinary late-filing penalties; high end assumes the IRS treats the missing 1099s as intentional disregard.
- US backup withholding$3,600
- 24% backup withholding you were required to take on $15,000 paid to contractors with no TIN on file.
- 1099 penalties$2,040
- 3 forms × $340 per form, counted twice: once for the IRS copy, once for the payee statement.
- Foreign withholding$3,840 – $4,800
- 24% backup withholding on $16,000 if the payees are presumed US; 30% if the income is US-source. A valid W-8 is what lets you treat it as foreign-source and settle the question.
If treated as intentional disregard$4,080
Replaces the 1099 penalty line in the high end: at least $680 per form, both copies, with no annual cap.
What this leaves out
- Interest on late-paid tax
- State information-return penalties
- Failure-to-deposit penalties
- Form 1042/1042-S penalties
How to close this
- Collect the form before the first payment. No form, no payment.
- W-9 for US persons. W-8BEN for foreign individuals, W-8BEN-E for foreign entities.
- Keep the signed form with the vendor record, not in an inbox.
- Review each form for the common errors: unsigned, blank TIN, trade name instead of legal name, wrong entity classification.