A trustee who waits until tax season to track down a vendor’s taxpayer ID number is doing the hardest version of an easy task. Form W-9 collection should happen at the start of a working relationship, not while a 1099 deadline is closing in. This is one of the most overlooked pieces of trust administration, and it’s also one of the easiest to fix.
A W-9 provides the legal name, tax classification, and taxpayer identification number of a person or business. The trust may need that information later to prepare tax reporting, such as Forms 1099.
For trustees, the practical rule is simple: collect W-9s before you need them, not after a vendor has moved or stopped returning calls.
Who Might Need to Provide a W-9?
Not everyone who receives money from a trust needs to complete a W-9.
Generally, a W-9 is used when the trust needs a recipient’s taxpayer identification information for federal tax reporting purposes. The IRS specifically recommends requesting a W-9 from U.S. persons when their information will be needed for an information return.
Depending on the trust and the activity involved, this may include certain professionals or service providers paid by the trust:
- Attorneys
- Accountants
- Property managers
- Contractors
- Consultants
- Other independent service providers
Some of these payments may ultimately need to be reported on a Form 1099, depending on the type and amount of the payment and the tax classification of the recipient. Attorneys, for example, have special reporting rules that can apply even when the law firm is incorporated.
Beneficiary tax reporting works differently and shouldn’t be handled the same way as vendor reporting. Trustees should work with the trust’s tax professional to determine what information is needed from beneficiaries and what forms the trust will ultimately issue, which will likely involve W-9s from beneficiaries paired with Schedule K-1s.
The 2026 Reporting Threshold Changed. The W-9 Rule Didn’t.
Starting with payments made in 2026, the One Big Beautiful Bill Act raised the Form 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000, with the amount set to adjust for inflation starting in 2027, as confirmed in the IRS’s own bulletin implementing the change. Backup withholding stays at a flat 24% when a required W-9 is missing or invalid.
For a trustee, this doesn’t change the collection process; it just changes which vendors end up on the January reporting list. A property manager or contractor the trust pays $1,500 during 2026 may no longer require a 1099, but the trustee has no way of knowing in January whether a vendor relationship will stay under that number or grow past it over the year. A single additional project can push a vendor from “under threshold” to “reportable” without warning.
That’s the argument for leaving the collection habit alone even though the number moved. Ask for the W-9 when the relationship starts, regardless of what you expect to pay that vendor over the year. It costs nothing to have the form on file for a vendor who ends up under the threshold, and it prevents a scramble if that vendor’s total payments cross $2,000 later in the year.
Ask for the W-9 Before Making the First Payment
Collecting a W-9 belongs in onboarding, not in year-end cleanup. If the trust hires a new contractor, consultant, attorney, or other service provider who may be subject to information reporting, request the W-9 before the first payment goes out.
By the end of the year, a trustee may have worked with several vendors. Trying to locate contact information, determine how a business is taxed, and track down a missing taxpayer identification number while preparing year-end reporting can turn a simple task into a significant project. A consistent process avoids most of that problem:
New vendor → W-9 → payment documentation → organized trust records.
Do Not Assume the Name on the Invoice Is Enough
W-9 does more than provide a Social Security number or Employer Identification Number.
The name on an invoice or check is not always the name that belongs on a tax form, which is exactly what a W-9 is meant to confirm. It establishes the correct taxpayer name and tax classification to use when the trust prepares information returns.
A business might operate under a trade name while filing taxes under a different legal name. An LLC’s federal tax treatment can also vary depending on how it’s structured, which changes how it should be reported. Rather than guessing based on what’s printed on an invoice, obtain the completed W-9 and use the information the vendor provided.
Review Your Records Before Year-End
A year-end review, done while the details are still fresh, is the easiest way to catch a missing W-9 before it becomes a filing problem. Look at everyone the trust paid during the year and confirm you have what your tax preparer or accountant will need, including a clear picture of what a California trust accounting needs to document.
A simple review might include asking:
- Do we have a W-9 for each applicable vendor?
- Is the W-9 complete?
- Has the vendor changed its business name or tax classification?
- Do we have clear records showing how much was paid during the year?
- Were any payments made personally by the trustee and later reimbursed by the trust?
Addressing those questions before tax preparation begins makes the reporting process considerably smoother.
Keep W-9s Secure
A W-9 can contain a Social Security number, Employer Identification Number, address, and other sensitive identifying information, which means it needs to be stored the way any confidential financial record would be. The IRS requires payers to protect taxpayer identification information obtained through a W-9 and use it only for appropriate tax purposes.
Don’t leave completed W-9s in an unsecured email inbox or a general folder that everyone on the team can open. Maintain them in a secure electronic location with restricted access, and if you’re collecting them electronically, use a secure portal or another protected transmission method rather than sending sensitive tax information through ordinary email.
What If Someone Will Not Provide a W-9?
If a required party refuses or fails to provide a valid taxpayer identification number, the trustee should not guess at the number or ignore the issue; additional reporting and backup withholding rules may apply instead. This is another reason to request the form before making payment rather than after.
How Smith Marion Can Help
At Smith Marion, our Trust and Estate Accounting Services help trustees, executors, attorneys, professional fiduciaries, and families keep clear, organized financial records throughout the administration process. We assist with organizing trust activity, reconciling accounts, tracking income and expenses, documenting payments and distributions, and preparing fiduciary accountings.
We also provide Court Accounting Services for trusts, estates, conservatorships, and other matters requiring detailed financial reporting in California, along with support for professional fiduciaries managing these responsibilities on behalf of clients.
If you’re administering a trust and want the financial records organized before tax reporting or an accounting comes due, Smith Marion can help bring clarity and accountability to the process.
Contact the trust’s accountant or tax preparer to determine how the payment should be handled. It’s far easier to resolve a missing W-9 before significant payments have already gone out the door than to fix it after the fact.
W-9s Are Only One Part of Good Trust Recordkeeping
A collected W-9 is only useful if it’s connected to the rest of the trust’s financial records, which is part of building good trust accounting habits from the start. For each vendor or professional, the trustee should also retain invoices, contracts when applicable, proof of payment, and documentation explaining the nature of the expense.
If the trust owns rental property, operates a business, sells property, or carries significant professional expenses, the number of transactions can add up fast. The goal is a financial record someone else can follow: if an accountant, beneficiary, attorney, or court reviews the trust’s activity later, they should be able to see who was paid, how much, for what, and how it was reported.
Common Questions Trustees Ask About W-9s
Does a trust need a W-9 from every vendor it pays?
No. A W-9 is generally needed only when the trust may have to file an information return for that payment, most commonly for unincorporated service providers paid at or above the reporting threshold. Attorneys are treated differently and can require reporting even when incorporated.
Do beneficiaries need to complete a W-9?
This is a separate process from vendor reporting. Beneficiary information typically supports a Schedule K-1 rather than a 1099, and the trust’s tax professional should confirm exactly what’s needed for each beneficiary.
What happens if a vendor won’t provide a W-9?
The trust may be required to apply backup withholding, currently a flat 24%, on future payments to that vendor. Contact the trust’s accountant before making the payment, not after.
Does a trustee need a new W-9 every year from the same vendor?
Not automatically, but it’s worth confirming the vendor hasn’t changed its business name, entity type, or tax classification, since any of those changes can affect how the payment should be reported.
Build W-9 Collection Into How the Trust Operates, Not Into Tax Season
W-9s are a small part of trust administration, but they’re a good test of whether the trust’s overall recordkeeping is organized or reactive. The easiest time to collect tax information is when a new relationship begins, not months later while someone is trying to prepare year-end forms.
Build W-9 collection into onboarding, keep the forms secure, review records before year-end, and loop in the trust’s tax professional whenever a payment’s reporting requirement isn’t obvious. A few minutes of organization at the start of a vendor relationship prevents a lot of searching and cleanup later.