Tenant asking landlord for W9

Investor · Los Angeles, CA · Member since 2014 · 285 posts · 142 votes

One of my tenants is asking me for a W9. Ever since they've moved in, they've been paying their rent in 3 checks: a personal check, a check from their first business, and a check from their second business. This has not been a problem so far. They're great tenants who I intend to keep. They're creative types and do freelance from home for a living.

Are there any reasons why I shouldn't fill this out for them?

Thanks for the help!!

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Nicholas Schommer

Real Estate Investor · Stevens Point, WI · Member since 2016 · 15 posts · 18 votes

If they are freelancers and deducting housing expenses for a "business in the home" situation, they have no need for your TIN, they just need to have accurate records in case they were to get audited (which is accounted for with the use of their business checks to pay for part of the costs). They only reason they would need your TIN is if they are applying for some state credit that requires "documented proof" that they have indeed paid the rent with business funds, but that would be a state specific form and not a W9. I am just skeptical of someone asking for information that they A.) do not need and B.) could do bad things with. This is just my two cents worth, take it for what you will.

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Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
9y
If your tenant is a business they are required to issue you a 1099 if you are not a corporation. That said. This 1099 does not change how it will be reported.
[email protected]224-381-2660
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Lee L.
OP
Investor · Los Angeles, CA · Member since 2014 · 285 posts · 142 votes
9y
Thank you all for the feedback. @Nicholas Schommer Your comment that sharing the W9 info might put me at greater risk of getting audited gives me much pause. I spoke to my accountant last night and he said sharing the info wouldn't matter for me.
My plan is to get more info from the tenants and see how they're going to use the info.
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Jason Mak
Rental Property Investor · San Marino, CA · Member since 2011 · 398 posts · 144 votes
9y
For what it's worth. I had some furnished apartments that I rented to corporations for their employees to live in. They requested W9 an I obliged. Like @Lee L. they always paid their rent on time and never gave me any trouble. It was not a big deal for me.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
Originally posted by @Lee L.:

Thank you all for the feedback. @Nicholas Schommer Your comment that sharing the W9 info might put me at greater risk of getting audited gives me much pause. I spoke to my accountant last night and he said sharing the info wouldn't matter for me.
My plan is to get more info from the tenants and see how they're going to use the info.
They are planning to send you a 1099 for the portion of rent their business paid. They are acting as though you have a business lease with them and plan to claim that portion of rent as a business expense. They are choosing to not use the home office deduction, probably because their CPA came up with this "great" idea to save them money. The IRS would probably prefer them to use the home office deduction which is what tax forms say to use. They are likely claiming more of the space towards their business than they actually use. This is typical audit red flag stuff.
It probably will not create a problem for you. You are actually claiming more income on your taxes than the 1099 will reflect. If your tenant gets audited, you may get contacted by the IRS. You are best just to claim ignorance to what they are doing at that point.
I am thinking what they are doing is not legal, only because wouldn't everyone just sign up with Amway and have their "business" pay half their rent each month?
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Sam DeMaio
Wholesaler · Sicklerville, NJ · Member since 2016 · 1 post · 0 votes
9y
I am going to assume they are using a portion of their rental property to conduct business therefore allowing them to deduct a portion of that off of there taxable income. In any event there is no need to have a w-9. Have them find a qualified accountant.
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Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
9y
If it is an individual tenant and they are not using it for anything but a home based business you do not need to provide them a 1099.
[email protected]224-381-2660
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Briley NA
Member since 2020 · 1 post · 0 votes
6y
If your tenant s are freelancers there are a few case scenarios here. One: They have hit hard times and are using housing subsidy or and aide program which requires them to provide a W-9 along with the leasing agreement in order to obtain said aide for housing payments. Two: They are using space in the private home as a home based office as a write of and are required to provide W-9 for said claimed space as a business space. Three: They are using space in the unit as a rental and must claim the earned income from that. Four: You required a large deposit and the tenet is concerned that the deposit money has been placed into an escrow account which will earn interest that the payee/renter is responsible for paying taxes on. Either way, you are still getting the money you required to lease said space to them. If they are using the W-9 form to provide for aid in the rental, this is actually a tax write off for you and it's a win win. If the renter has requested the W-9 form for any reason, you are required to provide it to them, as they have paid you money for said space. They are allowed to withhold rent and you are also liable for fines until the form is provided if you are dealing with a renter who is experienced in this subject.
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Chris Clover
Member since 2021 · 1 post · 0 votes
5y
I know this is old but I just came across it for the first time, meaning others might as well and needed to clear up one thing... Which is going to be coming up a lot with the recent pandemic and income issues...
When a tenant has an issue paying rent and applies for assistance, they MUST provide a copy of the landlords W-9.
Chances are, the tenant won’t even look at the W-9 but instead submit it directly to the state/organization that will be providing assistance and paying their rent.
Times like these, with eviction moratoriums and such, providing your tenant with your W-9 so you can be paid seems like a no-brainer but if you REALLY don’t want to give it to the tenant, you could get your tenants application number and provide it to the state/organization yourself.
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Nam Trang
Investor · Seattle, WA · Member since 2020 · 106 posts · 89 votes
5y
@Lee L. In general if a government agency needs your info they will contact you directly or send a form to have you fill out and fax to them. They don't, shouldn't. If a tenant suggests that they are acting as a go between, id be very suspicious, and wouldn't give the forms back.
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Waleep Alvi
Investor · Oakland, CA · Member since 2020 · 108 posts · 89 votes
5y
This is common practice when a nonprofit or business (and I assume a government agency) pays for a tenant's rent (all or a portion), or any other service. Businesses/corporations/nonprofits are required to collect W9 forms on vendors, service providers, etc. These forms are then used to issue a 1099-Misc in January which you will need on your taxes.

You may be able to engage directly with the entity that is collecting the information, your tenant can likely connect you with the right person (or their contact) at the organization. In my experience, individuals who do not have EINs are more skeptical of sending a W9 (rightfully so) as it contains their social security number.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y
I can't think of a reason they would need one, but I also can't think of a reason why you shouldn't give it to them. It takes one minute to fill out. Whether they are doing things correctly with their taxes is not your concern.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
Originally posted by @Chris Clover:
I know this is old but I just came across it for the first time, meaning others might as well and needed to clear up one thing... Which is going to be coming up a lot with the recent pandemic and income issues...
When a tenant has an issue paying rent and applies for assistance, they MUST provide a copy of the landlords W-9.
Chances are, the tenant won’t even look at the W-9 but instead submit it directly to the state/organization that will be providing assistance and paying their rent.
Times like these, with eviction moratoriums and such, providing your tenant with your W-9 so you can be paid seems like a no-brainer but if you REALLY don’t want to give it to the tenant, you could get your tenants application number and provide it to the state/organization yourself.

I have received rent assistance from several different organizations. I have never had to give the tenant a W-9, but I have had to give it to the organization issuing payment. In my my case the W-9 would have my social security number and home address on it, so I would never give this to a tenant, especially for rent assistance where they are not writing the check. I agree with your last comment, give it to the organization issuing payment.
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Abhishek Kapoor
Rental Property Investor · Member since 2019 · 13 posts · 2 votes
3y
Tenant in TX is requesting W9 because they contacted "Agency" and they needed the W9 so that they can assist the tenant with utility. This tenant is frequently late with rent and is generally unreliable. W9 is something I'm hesitant to provide. Thoughts? Thank you very much.
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