how and when do I return the w9 tax for to the IRS? Also, do I pay estimated taxes on the money paid to contractor?

After the end of the year, you use the W-9 to fill out the 1099-MISC and then you send the 1099-MISC (or copies of it) to both the IRS and the contractor.

You don't that form is for your records.

Form W-9 is used to report  to your employer that is used for tax purposes. The IRS doesn't need, or want, the form.

You NEVER pay taxes on payments YOU make to someone other than an employee.

If you have reason to ask these questions, you DESPERATELY need to consult a CPA about keeping proper business records.

If you are the client, make sure the W-9 is complete before you let the contractor do the work.

If the fail to give you their SSN, then you have to do backup withholding of 22% (or pay it yourself). 

If you are the "client" (hiring company).

You don't turn the W9 into the IRS.  You keep it for your records and pay the individual accordingly.

When you pay estimated taxes for your own business, you would estimate profit and pay estimated taxes based on profit.

- contractor earnings are excluded from profit just like you advertising or telephone is.