Hello there,

I've retained the services of a VA in the Philippines, which is going great thus far. Since I'm obviously paying the VA, I'm sure the IRS will want some sort of withholding. Can anyone fill me in on what would be required?

I've had conversations with several others who want to obtain the services of VAs as well. If I wanted to act as a middle man (which I have already cleared through the VA service), how would the taxation work for that?

Any help would be appreciated.

Best,
Drew

Hi Drew, the virtual assistant you contract with is required to manage her tax responsibility according to her country's independent contractor (IC) laws.

As an IC, she is not your employee, so you are not responsible to address any issues of withholding or tax status with or for her.

You can submit your payments to her each tax year as a business expense (if you are located in the U.S.)

I can't really speak to your question on taxation as a middle man / referral service without more information but as long as you're not receiving funds it's not your obligation to report the income other VAs / independent contractors receive. If you're receiving monies, commissions, or similar as the middle man then you'll want to provide your CPA or tax advisor with those numbers and report the income appropriately.

I'm not a tax advisor or expert, just answering based on my own experience and would recommend double checking with a tax specialist if you have any concerns about your working arrangements and the related payments you make or receive.

I hope this helps!

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Hi Tess,

Would it make sense to have the VA company overseas receive the funds and then have them pay me as the middleman?

Thanks
Drew

That's how I would want it set up if I was in your position - to avoid any additional tax headaches on your end.

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How are funds taxed when coming in from an international business?

If you're receiving 'other income' (income not attributed to you through an employer) then you pay whatever state and federal taxes are relative, it doesn't matter where the money comes from.

I'd suggest talking to a tax advisor or checking the IRS website for specific percentages, etc.

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Thanks for the help!! I'm going to schedule a meeting with my accountant sometime this week.

My pleasure! Sounds like a good idea...

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