Don’t Get Caught Owing The IRS Employment Taxes For Your Virtual Assistant

Semantics or Mindset? 

Is it purely semantics or does it reflect or even create your mindset? Working with a virtual assistant has become a common trend, and working with a VA/professional of any sort can bring about questions in regards to how to work together and what terminology is accepted use. 

  • Virtual Assistant, Independent Contractor, Business Owner vs Employee
  • Portfolio vs Resume
  • Meeting vs Interview
  • Client vs Employer
  • Sales Letters, Proposals vs Cover Letters 


These words may seem like their just semantics, but the reality is they play a huge role on the mindset. 

As a virtual assistant I am an independent contractor who is a business owner. This is what I do for a living and the proper terms to use. I am not an employee, but there is still a huge mindset issue that is heavily portrayed in the chosen terminology in the requests for proposal’s that I often read. 

You may not think this is important, but in fact it is. If you are not careful about your chosen terms the IRS can actually come back to you and say this person is an employee and you now owe X amount of dollars in back employment related taxes. 

Not only that, but it affects your mindset. If your mindset is that the independent contractor that you’ve chosen to work with is an employee you will attempt to treat them as an employee and this will lead to less than satisfactory results because the fact is they are not your employee and will not behave as such. 

Here are a few tips to help you move into the right mindset when working with an independent contractor (virtual assistant, website designer, or other professional): 

  1. Independent contractors are not your employee. They are in fact a business owner, and will do things very differently than an employee will do them. They set their own hours. They answer to themselves and are their own boss.
  2. They should not be submitting resume’s and cover letters and you should not be requesting those items from them. You would not ask a doctor, a lawyer, or other professional for these items. Why a VA or independent contractor? Instead you will submit a request for proposal to them and they will submit a proposal to you. They may need to ask some clarifying questions first, but they will submit a proposal.
  3. If the proposal is accepted by you, you will more than likely be requested to sign a contract and NDA.
  4. There is no such thing as interviewing independent contractors. This is for employees. You may request a meeting to get know each other, ask each other questions, and what not, but remember to interview someone for a job is an employment term.
  5. VA’s or contractors should not be requested to fill out an application this is what the proposal process is for. If you need to learn more about them this is what their website is for. If they don’t have a website then you can request a meeting or a professional portfolio of some sort.
  6. You will not provide any of the following:
    1. Insurance of any type
    2. Pay any taxes on behalf of the independent contractor
    3. Equipment, software, office space, etc.
  7. You should only be providing them with scope of project and necessary items such as log in information to your accounts needed to complete the project, deadlines etc., and trust that your chosen professional knows what to do, when to do it, etc. This can be a sticky situation that can also get you into a legal employee / employer relationship as far the IRS is concerned. 


So be very careful how you address professional working relationships so that you do not get caught in the IRS trap and owe money to them. Be careful to address your chosen professional with the right mindset, show them respect, and treat them as another professional and not as an employee and you will set them free to be able to assist you in fantastic ways.

Do you have any other suggestion or experience with this area you’d like to share with us? Please do so in the comments below. We’d love to hear from you!


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Christian Mom of 2, animal lover, your virtual business partner helping you create success in your business, owner and CEO of Rhonda's Virtual Office and Partner of One Life ... Plan-It! discovering new passions in my business everyday and loving it!

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