Keeping it legal: paying your virtual assistant
Outsourcing April 28th, 2008I was recently asked about the logistics of paying our virtual assistant. I certainly don’t claim to be an expert in these matters- please check with your accountant. If you have any helpful tips, please share them.
Our setup is pretty simple. Using PayCycle we can have assistants set up as contractors, and then send off checks really easily. We have also used PayPal in some cases.
If you pay them less than $600 in any given year, then nothing further is required. If you go beyond the $600, you’ll need to have them fill out a 1099 form, and submit a copy to the IRS. I have no idea what the ramifications are if your assistant is not based in the U.S. We’re all onshore here. 
And of course if you don’t wanna mess with all that, you can just use an outsourcing service (sorry, couldn’t resist).
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I’m a Canadian VA, and according to the IRS, all my US based clients require is a statement of account from me at the end of each calendar year.
As long as it shows my name, address and the amount they have paid for my VA services, the IRS is happy
Jill
Hi Jed. When will HTD launch? I’ve been testing out AskSunday and I can see some advantages to HTD…eagerly awaiting!
What about VAT – if I have contractors working in France or Poland (EU) and I’m an US corporation, do I have any VAT requirements or is that entirely for transactions within the EU?
Jill, your clients need a statement from you only if they’re trying to deduct the expenses from their business. What the post is about is reporting money moving in the other direction: if I (a US person) hire someone else (another US person), then the tax department wants a note from me so they can keep my contractor honest.
If somebody else is wondering about the same thing as Scott – my EU-based corporation doesn’t have to charge VAT to customers outside of it, so if you happen to be in the US or elsewhere, don’t be concerned about VAT.