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Completing IRS Form W-9 for a Self-Directed IRA or Solo 401(k)

IRS Form w-9
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IRS Form W-9—Request for Taxpayer Identification Number and Certification—is a frequently used IRS form.  If you have your own business or work as an independent contractor, a client may request that you fill out and send a W-9 so they can accurately prepare a 1099-NEC form to report the payments they make to you at the end of the year.  However, in the Self-Directed IRA or Solo 401(k) universe, a W-9 is typically required to be submitted for purposes of opening a bank account or confirming there is no backup withholding tax, which applies to non-U.S. persons at a rate of 30%.

In sum, a W-9 is not a tax form but simply an information return that is used to confirm one’s taxpayer information for purposes of filing a 1099 or other IRS form.  The W-9 is also used to confirm the taxpayer is a U.S. person and is not subject to a 30% back-up withholding tax that would apply to non-U.S. persons.

Below is a summary of how to complete the IRS Form W-9 for a Self-Directed IRA or Solo 401(k) plan.

Completing IRS Form W-9

Self-Directed IRA

For Self-Directed IRA investors that have made IRA investments in the name of the IRA and not in the name of an LLC, the W-9 Form should be completed as follows:

Line 1: Name:  Include the name of the IRA.  For example – IRA Financial Trust Company CFBO John Doe IRA.

Line 2: Business name/disregarded entity name, if different from above: Leave black

Line 3: Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.   Select “Other” and include the word “IRA”

Line 4: Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Please include “1” next to “Exempt Payee Code” and “A” under “FATCA” code, if you are submitting this form for accounts maintained outside of the United States.  You can leave this part black if you will be making U.S. based investments.

Lines 5 & 6:  Please include the address of the IRA custodian that custody’s your IRA.  For example – for IRA Financial Trust: 5024 S Bur Oak Place.  Suite 200 Sioux Falls, SD 57108

Line 7: You can skip, as it is optional

Part I:  Please include the Tax ID# for the IRA Custodian or the Tax ID# for your IRA if you acquired one from the IRS.  You can ask your IRA custodian for their EIN. To acquire an EIN for your IRA, simply go to the IRS website, select “View Additional Types, Including Tax-Exempt and Governmental Organizations,” then select “IRA” and simply complete a few simple questions. Do not include your social security number.  Do not include your social security number. 

Part II:  Please sign and date the Form.

    Self Directed IRA Info Kit

    Get the Info Kit

    Single Member Self-Directed IRA LLC

    If you have established a self-directed IRA LLC that is only by just one IRA, the LLC would be treated as a disregarded entity for Federal Income Tax purposes.  Therefore, the IRS Form W-9 should be completed as follows:

    Line 1: Name:  Include the name of the IRA.  For example – IRA Financial Trust Company CFBO John Doe IRA.  Since the LLC is treated as a disregarded entity, the IRA is deemed the owner of the investment, and, thus, the IRA info should be inserted in line 1.

    Line 2: Business name/disregarded entity name, if different from above: Please include the name of the LLC.  For example, if XYZ LLC is owned by IRA Financial Trust Company CFBO John Doe IRA, please include XYZ LLC.

    Line 3: Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.   Please select “Individual/sole proprietor or single-member LLC”

    Line 4: Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Please include “1” next to “Exempt Payee Code”  and “A” under “FATCA” code, if you are submitting this form for accounts maintained outside of the United States.  You can leave this part black if you will be making U.S. based investments.

    Lines 5 & 6:  Please include the address of the LLC.

    Line 7: You can skip, as it is optional

    Part I:  Please include the Tax ID# for the IRA Custodian or the Tax ID# for your IRA if you acquired one from the IRS.  You can ask your IRA custodian for their EIN. Since the LLC is treated as a disregarded entity, the IRA is deemed the owner of the investment, and, thus, the EIN of the IRA custodian or a specific IRA EIN should be used.  To acquire an EIN for your IRA, simply go to the IRS website, select “View Additional Types, Including Tax-Exempt and Governmental Organizations” then select “IRA” and simply complete a few simple questions. Do not include your social security number. 

    Part II:  Please sign and date the Form.  I recommend you include the word “Manager” in parentheses when you sign the form.

    Multiple-Member Self-Directed IRA LLC

    If you have established a self-directed IRA LLC that has more than one IRA owner, the LLC is treated as partnership Federal Income Tax purposes.  Therefore, the IRS Form W-9 should be completed as follows:

    Line 1: Name:  Include the name of the LLC and not the IRA.  Since the LLC is treated as a partnership for tax purposes and not a disregarded entity, the name of the LLC should be included in line 1. 

    Line 2: Business name/disregarded entity name, if different from above: You can skip since you already included the name of the LLC in line 1.

    Line 3: Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.   Please select “Partnership”

    Line 4: Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Please include “1” next to “Exempt Payee Code”  and “A” under “FATCA” code, if you are submitting this form for accounts maintained outside of the United States.  You can leave this part black if you will be making U.S. based investments.

    Lines 5 & 6:  Please include the address of the LLC.

    Line 7: You can skip, as it is optional

    Part I:  Please include the Tax ID# for the LLC.  Since the LLC is treated as a partnership for tax purposes and not a disregarded entity, the EIN of the LLC should be used and not the EIN of the IRA or the IRA custodian.

    Part II:  Please sign and date the Form.  I recommend you include the word “Manager” in parentheses when you sign the form.

    Solo 401(k) Plan

    A solo 401(k) plan is not a new type of retirement plan. It is a traditional 401(k) plan covering only one employee.  A solo 401(k) plan is treated as a tax-exempt trust, much like an IRA.  Therefore, the IRS Form W-9 should be completed as follows:

    Line 1: Name:  Please include the name of the Solo 401(k) plan.  For example, ABC 401(k) plan.

    Line 2: Business name/disregarded entity name, if different from above: You can skip since you already included the name of the 401(k) plan in line 1.

    Line 3: Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.   Please select “Other” and then include the word “401(k) plan”

    Line 4: Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3): Please include “1” next to “Exempt Payee Code” and “A” under “FATCA” code, if you are submitting this form for accounts maintained outside of the United States.  You can leave this part black if you will be making U.S. based investments.

    Lines 5 & 6:  Please include the address of the 401(k).

    Line 7: You can skip, as it is optional

    Part I:  Please include the Tax ID# for the 401(k).  You can typically find the EIN of the 401(k) plan in the plan Adoption Agreement or Plan Summary Description document. To acquire an EIN for your 401(k), simply go to the IRS website, select “View Additional Types, Including Tax-Exempt and Governmental Organizations” then select Employer Plan (401K, Money Purchase Plan, etc.)” and simply complete a few simple questions. Do not include your social security number. 

    Part II:  Please sign and date the Form.  I recommend you include the word “Trustee” in parentheses when you sign the form.

    Conclusion

    Completing a W-9 for your Self-Directed IRA or Solo 401(k) does not have to be difficult or stressful.  The W-9 is essentially an informational form used to confirm your identity or U.S. presence.  Hopefully, you will now be able to compete the W-9 form for your respective plan quickly and correctly.

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