First Person: A W-9 Error Cost Me at Tax Time

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Tax season is not a fun time for anyone, unless you happen to be getting a massive refund. Working as a freelance writer, I cannot expect for that scenario to occur. I’ll be satisfied though if I don’t experience ever again what happened to me a few short years ago.

Back in 2007, while I was transitioning between newspaper jobs, I took a part-time job as a bank teller at a local credit union. I looked at it as a source of steady income while I was working to get hired at another newspaper. I held the job for several months until some quality freelance writing opportunities came my way and I traded working at the credit union for working as an MLS soccer beat writer.

During my time at the credit union, I noticed that the amount of taxes withdrawn from my paycheck every two weeks seemed much lower than what was withdrawn at my prior newspaper job. I did not give much thought to it. At the time, I assumed that it was a result of me earning a lower wage there than at my previous workplace and counted it as a stroke of good luck.

When it came time to file my 2007 tax return, however, I realized it was a much bigger issue than I originally thought. A mistake on my W-9 form meant that too little money had been drawn out for federal and state taxes. I had mistakenly written down the wrong number in a box claiming an exception at the time. Now I owed close to $1,000 in taxes — money which I did not have in my savings account.

It was an embarrassing situation and the solution put a major dent in my wallet. My mistake meant I would need to borrow several hundred dollars to make up the difference on my tax return and avoid a major penalty. I cobbled together money to try and cover the shortfall, sent off a check to the IRS and spent the remainder of 2008 making monthly payments to erase the debt I had incurred paying those missing taxes.

I picked a tough way to learn a valuable lesson. It does matter how you fill out a W-9 form when you begin a new job. A simple mistake can cost you hundreds or even thousands of dollars down the road.


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