USA Not sure how to apply

[ehammer922]

I have recently hired a subcontractor to do some work for our company and he doesn't carry the required insurance. So I withhold 10% from each check, becuase my insurance will charge me at audit time.

How would you record this transaction?

Currently to be able to give him a check the accounts I have been writing on are as follows:

Wages/Subcontractor
Expense/ Workers Comp Insurance

I know that applying to the insurance acct is most likely incorrect, but the person handling the system before me has no acct that would be close to where I want to apply.

I see this needing to be a filter acct, because I will take out of it and the end of the year what the insurance company charges me and then give the sub the difference.

Thanks in advance for your help.

 

[Qbookslave]

Set up a "Reserve for Subcontractor Insurance" Account.