3 Things 4-18

04/18/2022 Although MAS is a financial services company, not everything published herein will be about numbers or investing. But no matter the topic, we hope for three things: 1) That you find the time you spend engaged worthwhile. 2) That you’ll reach out to us for help in any of our areas of expertise if something we discuss creates an urging in you to do so. 3) That you’ll share this with somebody new each time you read it. Thing One Do you need an umbrella insurance policy? Umbrella insurance isn't required by law but is most often purchased by people who have a lot of assets to protect or a high chance of being sued. Per nerdwallet.com, it might be worth purchasing umbrella insurance coverage if you:

  • Own property.

  • Have significant savings or other assets.

  • Are worried about liability claims against you when traveling outside the U.S.

  • Own things that can lead to injury lawsuits such as pools, trampolines, guns or dogs (check with your insurer to make sure your breed is covered).

  • Are a landlord.

  • Have an inexperienced driver in your household.

  • Coach kids’ sports.

  • Frequently host parties in your home.

  • Serve on the board of a nonprofit.

  • Regularly post reviews of products and businesses.

  • Participate in sports where you could easily injure others (such as hunting, skiing or surfing).

  • Are a public figure.

Umbrella policies typically start at 1 million dollars worth of coverage and providers of these policies require the applicants to have existing liability limits on their auto and home policies at the high end of the range (usually a minimum of $250,000/$500,000/$100,000 on auto and $300,000 on home). The liability coverage under an umbrella policy kicks in when the limits of the underlying policy have been exhausted. To qualify for a policy, an applicant must have a relatively clean driving record and a low overall claims history. That and the fact that the premiums for the underlying insurance can potentially be higher are the downsides to umbrella policy ownership. The upside is that the policies are a relatively inexpensive way to buy peace of mind. They cost roughly $150 to $350 (on average) per year for the first million dollars of coverage and about $100 per additional million dollars of coverage above that. Usually, they are sold by either the provider of your current home or auto policy, but there are also a few stand-alone providers who will consider selling you one provided you have the high liability limits and clean records mentioned above. Here’s one final point to consider. In the nerdwallet.com excerpt above, it was stated that those with significant savings or high assets should consider umbrella policies. It’s worth noting that while certain retirement accounts/assets like 401k, 403b, and pensions are protected from lawsuits by the Employee Retirement Income Security Act of 1974 (ERISA), traditional IRAs don’t have the same protection under that law so they may be vulnerable under certain circumstances. That’s as good a reason as any to carry an umbrella on a sunny day.

Thing Two Did You Get A Form 1099 For Your Saturday Morning Golf Winnings? You didn’t need one to file your 2021 taxes by the April 18th deadline, but you may well need one going forward. That’s because the IRS is now requiring platforms like eBay, Etsy, Venmo, Airbnb, and uber to send a Form 1099-K to the Internal Revenue Service reporting an individual’s total revenue if platform earnings top $600. Here’s more on that from the Wall Street Journal: “…Now, many more sellers, resellers, and gig workers than in the past will have their platform earnings reported to the IRS. The upshot: They may have to pay taxes they haven’t been paying, or else keep complex records showing why they don’t need to. Under prior law, platforms only had to send 1099-K forms if a vendor earned more than $20,000 and had over 200 transactions. The new bar is so low that opponents are trying to get it changed before the platforms send out a blizzard of confusing tax forms next January. Here’s what’s going on. Last year, Congress quietly lowered the 1099-K threshold as part of the American Rescue Plan Act. The goal was to boost tax compliance in an area notorious for lacking it—income the IRS doesn’t know about…” Applications like Venmo, Zelle, and Cashapp have been commonly used for mundane things like paying off a Saturday morning golf bet when players don’t have paper cash on hand. With the new IRS rule, golfers (and others who receive cash through mobile payment apps) should be aware that if their winnings/receipts total more than $600 for the year, the IRS might want to see them in the parking lot too.

Thing Three Just A Thought "We see the world, not as it is, but as we are──or, as we are conditioned to see it.” – Stephen R. Covey