Form W-9 for Sub-Contractors & Umbrella Insurance

If your business will pay sub-contractors in 2021:

If your business will pay subcontractors for work performed for you in 2021, they should provide you with a completed W-9 before they begin the work. This form can be found at: https://www.irs.gov/pub/irs-pdf/fw9.pdf

If a sub-contractor will not give you a W-9 form, then you are required to withhold 24% of the payment due to this sub-contractor. This is considered backup withholding and needs to be paid to the IRS in order to ensure the IRS receives the tax due on this income. Typically, many sub-contractors will finally provide you with a W-9 form when they see that the payment from you will be reduced by 24%. Please see the following link for more details: https://www.irs.gov/newsroom/how-to-report-nonemployee-compensation-and-backup-withholding

Should you carry umbrella insurance?

If you have assets – house, car, investment, retirement, checking or savings accounts – you should be aware that, if you are sued and do not have enough liability insurance to cover the costs, all of your assets are exposed. An umbrella policy can provide additional protection to prevent the possibility of financial ruin due to an unforeseen accident or one misstep. Speak to your insurance broker to review your existing policies and determine if there is a need for an umbrella policy.