Question

At what point do you need the W-9 form returned to you from the motor carrier?

a) Before the shipment is delivered
b) After the shipment is delivered
c) Before tendering the load
d) After securing a carrier

Answer 1

A W-9 form should be collected from the motor carrier before tendering the load to establish tax reporting information ahead of making payment for the carrier's services. This ensures all tax-related documentation is in order for both parties.

Step-by-step explanation:

In context of business relations and tax compliance, a W-9 form is a document requested by a business entity or individual who is required to file an information return with the IRS. It provides the necessary taxpayer information for reporting purposes. Specifically, in the case of a motor carrier working as an independent contractor, the company that hires the carrier needs to get a completed W-9 form from the carrier before tendering the load. This is crucial to ensure all tax-related matters are appropriately managed from the outset.

The importance of collecting the W-9 upfront is to have the proper documentation in place before payment is made for services rendered. This allows the hiring company to report the payment correctly using the motor carrier's Taxpayer Identification Number (TIN) on the required 1099-MISC or 1099-NEC form if the amount paid meets the IRS reporting threshold for the tax year.